Severance payments made to former council officers totalling millions of pounds of taxpayer money are under investigation amid fears they may be unlawful.
Top officers at Northumberland County Council are looking into eight payments made to former employees made between 2017 and 2022 either as part of a redundancy package or a mutual agreement to leave the authority.
Six of the payments, all made to unnamed officers, were over £100,000 while two were in the range of £50,000 to £100,000.
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Speaking at Wednesday’s meeting of the the council’s audit committee, former council leader Peter Jackson said one of the payments amounted to a total remuneration package of £570,000.
Coun Jackson said: “I think there was an awful lot more that needs to be looked at. It is a bit of a shame that the council has taken so long to get round to it.
“Figures have shown that the exit payments paid by this council are some of the highest in the country. What it points to, to me, is that it is systemic.
“There is question marks about unlawfulness, and I would say that it veers into illegality. Some of these payments were made for a reason and one of them was in excess of £570,000 for a post that was actually not redundant.
“£100,000 is the level that should have been reported to full council, and most of these were not.”
Stephen Watson, the independent chairman of the audit committee, warned Coun Jackson he was at risk of “writing the bottom line” too early, and that the monitoring officer and the finance chief would decide whether the payments were unlawful.
Coun Jackson replied: “Why were most of these very large payments not reported to anyone? No council member, including the leader and the cabinet?
“A number of these payments were to do with payments of statutory officers. That should be reported to full council, and they were not.”
Former cabinet member Nick Oliver said another had been made just days before the Government brought in a £95,000 cap could make on employee exits in December 2020.
Coun Oliver, who was cabinet member for corporate services under Coun Jackson’s leadership, suggested that the council’s pay policy had been altered to allow the payments to go through.
He said: “We’re talking about millions of pounds of public money. What the report tells us is that there were some fairly significant failures.
“The pay policy of the council failed to keep up to date with legislation – it did, but a section was removed. I would be curious as to why that was removed and I have been asking the question as to whether it was removed deliberately. ”
Coun Oliver also said that officers “disappeared” during his time as a cabinet member with no explanation offered.
He continued: “I understand this report is not about blame or accusation, but as a cabinet member I raised concerns about some of these issues. We had officers disappearing and not being told that they were being paid off.
“We asked for information and we were refused that information. I had written to the chief executive and other directors and I can show you the responses saying I wasn’t allowed – I was the cabinet member at the time.
“There are some significant questions that need to be asked. The timing of one of these payments was just before the Government introduced a cap.”
At this point, Mr Watson interrupted and warned the committee was in danger of “straying from its remit”.
The council’s chief internal auditor, Kevin McDonald, said that any exit package paid to council officers over £100,000 should have gone to full council for approval. According to him this had not happened in five cases and this constituted as a breach of the Localism Act 2011, which states that authorities should offer full council the opportunity to vote before large severance packages – advised as those £100,000 – are approved.
Current leader Coun Glen Sanderson said: “I am deeply troubled by this report and the implications of it. I have some strong views on the fact that I was excluded from this.
“I have asked for a meeting of the employment and appeals committee so we can look at this and take action is necessary.”
The council’s finance chief, Jan Willis, and monitoring officer Suki Binjal, are now considering whether or not those breaches are unlawful. If so, the council would have to issue a section 114 notice.
Ms Willis did so last year when payments regarding the council’s international healthcare consultancy business, Northumbria International Alliance, were found to be in breach of the Localism Act.
Ms Willis said: “We have what we need for now. We just need to be given a bit of time and space to work through these files and then we will come to a conclusion on each of these cases.”
A further report has been commissioned to look at redundancy payments further down the payscale, in order to determine whether it has been a “systemic issue”.
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