A decision to grant a severance payment of £95,000 to a council chief executive was unlawful, Wales’ spending watchdog has concluded.
In a public interest report, Auditor General Adrian Crompton said the process followed by Pembrokeshire County Council that resulted in the payment to Ian Westley in November 2020 amounted to a serious breakdown in governance.
The report states: “There was consensus that one of the factors that led to [his] departure was that relationships between him and some members of the Council’s Cabinet were, at the very least, strained.
“Some officers and the former chief executive told my auditors that his relationships with some cabinet members had irrevocably broken down.
“However, those interviewed expressed differing views as to the reason for the relationship problems. Some, including the former chief executive, told my auditors that the difficulties were caused by poor member behaviour towards him over a sustained period, amounting to bullying and intimidation.
“Others, including the council leader Cllr David Simpson, maintain that while cabinet members were robust in challenging and scrutinising the way in which the then chief executive was performing his role, he was not subjected to bullying.
“I note that the then chief executive raised concerns with the council leader regarding his treatment in 2019. However, the former chief executive did not raise his concerns under the council’s HR policies or by making a complaint that members had breached the council’s Member Code of Conduct.
“The former chief executive’s concerns were therefore never investigated. As a consequence, it was not determined whether or not his concerns had substance.”
The report highlights what is described as “a failure to address and resolve relationship difficulties between members and officers, lack of clarity on respective roles and responsibilities, examples of officers failing to properly discharge their professional duties, disregard of external legal advice, failure to follow internal policies and procedures, poor and untransparent decision making, failure to document and report the reasons for decisions, members of the council not being given the opportunity to review and scrutinise the proposal, and failure to comply with legislative requirements”.
Mr Crompton states: “In my view, the council has much work to do to satisfy itself that it has robust governance arrangements in place and that these arrangements are being complied with.
“My audit also identified cultural and behavioural concerns relating to the way in which the former chief executive’s departure was handled. The council needs to satisfy itself that these concerns are not symptomatic of a wider problem.”
The report sets out a list of detailed conclusions:
- The council’s leader and its then chief executive reached agreement that the chief executive would leave his employment with a payment of £95,000, but the basis on which he was departing and the reason he was to receive a termination payment was not properly recorded.
- The council’s head of human resources instructed external legal advisers to draft a settlement agreement in respect of the chief executive’s negotiated departure with a termination payment, but the instructions were not based on established facts.
- The council’s external legal advisers advised the council’s head of human resources to clarify and document the basis on which the then chief executive was leaving his employment and the reason why he was to receive a termination payment of £95,000, but the head of human resources did not act on this advice.
- The council’s external legal advisors prepared a draft settlement agreement based upon the oral instructions of the head of human resources, but the wording was subsequently amended on the Leader’s instructions resulting in the Council being exposed to a potential tax liability.
- There was a general lack of clarity regarding who was advising who in the legal negotiations around the settlement agreement, and this was compounded because the head of human resources shared the council’s external legal advice relating to the departure of the council’s then chief executive with him.
- The decision to make a termination payment of £95,000 to the council’s former chief executive was incorrectly taken as an executive decision and, in my view, the payment was contrary to law.
- The council’s head of legal and democratic services raised a concern with the council’s monitoring officer that the proposed payment to the council’s chief executive might not be compliant with the council’s statutory pay policy statement. But this concern was not addressed and the council appears to have deviated from its pay policy statement without being able to demonstrate good reason for doing so.
- The council’s decision-making process in respect of the departure of its chief executive with a termination payment was fundamentally flawed and did not comply with legislative requirements.
- The former chief executive received a termination payment of £95,000 in advance of the agreed date of payment set out in the settlement agreement.
- Non-executive members of the council were not given the opportunity to review and decide whether the chief executive should receive a termination payment.
Responding to the report, a council spokesman said: “Pembrokeshire County Council welcomes the detailed report by Audit Wales into the settlement agreement with its former chief executive, and we recognise the seriousness of its findings.
“Significant progress has already been made in many of the areas identified in the Audit Wales review of events which took place over a year ago. The council recognises that there is still more to be done.
“A comprehensive improvement programme was established last year to address observations originating from external and internal reviews commissioned by the council.
“The Auditor General’s report, other associated reports and an action plan to address recommendations will be considered by a meeting of the council on February 1.”
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