‘Unlawful’ exit payments ‘will not happen again’

AN error in Northumberland County Council’s pay policies between 2019 and 2022 could have led to exit payments to council staff totalling more than £1m which were deemed “unlawful”.

A new report that will be presented to councillors claims steps have been taken to rectify “historical” flaws in the pay policy, after the matter was referred to Northumbria Police. According to the report, errors in the adoption of the pay policy in the years 2019/20, 2020/21 and 2021/22 led to a lack of proper democratic oversight in decisions around exit payments.

In the report, the council’s top lawyer Stephen Gerrard confirms to councillors that “all steps have been taken and adopted” to ensure identified issues have been addressed.

Under the Localism Act, exit payments to chief officers must be approved by the staff and appointments committee, or by full council if the total severance package exceeds £100,000.

In his report, Mr Gerrard wrote: “The revised pay policy procedure which the council had been advised to adopt failed to provide the proper level of democratic oversight. The reasons for this remain unclear.”

The report goes on to say that a “detailed review” by the council’s internal audit team identified “several occasions where it appeared the payments received by officers as part of their severance arrangements may have been made under a flawed procedure”.

Mr Gerrard added: “There is no evidence that the officers receiving those payments realised the council’s adopted process was flawed. They received the payments in good faith. The sums received were broadly in line with the arrangements that had previously been made. However, the fact remained that members were not given the appropriate opportunity to express a view before the payments were made.”

Mr Gerrard said the payments have now been “regularised” by the staff and appointments committee, while the pay policy has been “completely revised” with the “necessary element” of member oversight restored. The new pay policy was adopted by the council last month.

Council leader Glen Sanderson said: “I’m pleased this report finally draws a line under historical payments that go back more than two years. I assure residents we’ve put in place robust checks and balances to ensure matters such as these will not happen again.

“We’ve had a new, senior team in place for over a year and they are making sure our new rules and procedures are operating very effectively. I welcome these matters being referred to the police last year and we can now move on.”

The long-running saga concerns six payments made to top council employees between May 2017 and May 2022. In July last year, an investigation found that the payments, totalling £1,068,801.98, did not have the proper authorisation from councillors.

The investigation was commissioned after alleged unlawful expenditure was identified in relation to the council’s international health consultancy business, which was found to be in breach of the localism act. Initially, the matter was not referred to Northumbria Police. However, following further discoveries the decision was taken to send a report to the force in January.