How blogging works

Now I’m just getting this blog off the ground, and I don’t want to upset anyone. But I couldn’t help noticing the evolution of one little story today as a very good example of how the blogosphere can get it badly wrong.

The story in question revolves around the deposits of local authority money in Iceland’s failing banks.

As in so many other instances, the mainstream media kicked things off with a quote from Plaid Cymru economist Eurfyl ap Gwilym in this morning’s Western Mail:

“There is a UK contingencies fund held by the Treasury for unforeseen circumstances like this. The Assembly Government does not receive an allocation from it and therefore responsibility for making any compensation payments that may be appropriate lies squarely with the Treasury.”

This was then picked up by blogger Ordovicius, who appeared to decide that this revelation put Welsh Secretary Paul Murphy (who allegedly suggested that the Assembly, rather than the UK government, should bail out Welsh councils) firmly in the wrong:

“If we must have a Welsh Secretary, could we at least have one who knows his arse from his elbow?”

But it fell to Plaid researcher Ian James Johnson to really bump the story along, commenting:

“Plaid's economic adviser, Eurfyl ap Gwilym, has already noted that, while local government is indeed in devolved territory, the contingency funds that are being used to assist English Local Government groups are not, and have no such Barnett consequential.”

Screech! Hold on a minute. Let’s look again at what Eurfyl ap Gwilym actually said again:

“There is a UK contingencies fund held by the Treasury for unforeseen circumstances like this.”

Which is a bit different to:

“the contingency funds that are being used to assist English Local Government…” (my emphasis)

Ok, so perhaps Ian James Johnson knows something we don’t. Perhaps the Local Government Association website can help. Are Treasury funds being used to support English local government? Here is a quote from a press release issued by the LGA today:

“Council leaders are today calling on the Treasury to ensure financial stability in the eventuality that a small number of local authorities get into financial difficulties, following the crash of Icelandic banks. The current estimate from the Local Government Association, which represents over 400 councils in England and Wales, is that at least 45 councils had deposits in affected banks.” (my emphasis again)

This sounds to me as if 1) no council is actually in receipt of emergency Treasury funds and b) no distinction is being made between English and Welsh councils.

I may be wrong, of course. And there may be a question about the Barnett consequential of this contingencies fund (although I always thought the Barnett formula allocated money on the basis of increases to the comparable budget in England, so quite how that applies to a standing fund which is presumably carried over from year-to-year is unclear). But equally, there does appear to have been some carelessness in how this original quote, about the existence of the fund, got spun into one about the use of the fund. And the difference is really quite important.

And that, ladies and gentlemen, is how blogging works.