Bungle sees ex-CEO get extra £32,000

Health board criticised in watchdog report over series of mistakes when negotiating financial package for former chief executive who departed amid cash crisis

The former chief executive of NHS Tayside received an extra £32,000 in termination payments because of errors by the board, says Scotland’s public spending watchdog.

A report on the health board’s finances and performance said a “number of mistakes” were made by bosses negotiating the £90,000 exit package for Lesley McLay.

Ms McLay, pictured right, was removed as chief executive in April in a Scottish Government purge of the board’s leadership, following a series of cash crises.

The Auditor General said the board was wrong to lengthen her notice period and include pension contributions in the departure deal, which saw its value more than double.

Caroline Gardner said: “The decision to reach a negotiated settlement with the former chief executive was reasonable, but there were several weaknesses in the settlement process and a lack of good governance.”

During negotiations for Ms McLay’s settlement in July, the board decided to increase her notice period from three to six months, claiming that would bring her in line with other chief executives.

That increased her payment in lieu of notice by £32,105.

Ms Gardner said: “Since these discussions with the board, auditors have confirmed that the current chief executives of three territorial and four special boards have contractual notice periods of three months, with the others having contractual notice periods of six months.

“The board’s assumption that the former chief executive’s notice period needed to be changed to bring parity with all other boards was, therefore, not correct.”

Ms McLay received a £90,000 settlement when she left the board on July 31, as reported by The Courier in August.

In another bungle, the deal includes £19,135 in employer pension contributions to cover her notice period.

But staff are not entitled to those payments for serving their notice period, the Audit Commission report said.

“The board identified late in the negotiation process that payment in lieu of notice does not represent pensionable service and, therefore, pension contributions should not be made.

“At this late stage, the former chief executive was not prepared to consider an updated settlement.”

NHS Tayside has accepted it made two errors. It says the pension payment will be “recovered through year-end adjustments” with the Scottish Public Pensions Agency.

Last night, the health board was unable to say whether it would seek to claw back the £32,000.

Murdo Fraser, the Perthshire-based MSP, said the report makes “grim reading”.

“Over-paying departing staff to the tune of £51,000 is simply not on and underlines just how poorly run things have been run at the health board,” the Conservative MSP said.

“Employees who have made serious errors should not be handed golden goodbyes from the taxpayer.”

“There were several weaknesses in the settlement process and a lack of good governance. CAROLINE GARDNER