‘Something Rotten’ As Council Chief Quits With £300,000 In Public Money

A senior local government official is to be paid more than £100,000 in taxpayers’ money on top of a £200,000 retirement package after convincing councillors to make him redundant.

John Lindsay, the chief executive of East Lothian, persuaded his council to abolish his department as part of plans to cut the number of top managers.

Mr Lindsay, 59, who would have been entitled to retire this year anyway, told councillors they must make him redundant “on grounds of efficiency”.

The Labour leader of the council has confirmed that this payment will be the maximum available under a scheme just adopted by the council – a sum of more than £130,000. That will be paid on top of his pension of £55,000 a year and a lump payment of £155,000.

Last night opposition politicians said the payout revealed “something rotten” at the heart of the authority.

However, the council leadership defended the deal, claiming it would save council taxpayers £400,000 over four years.

Some of the details of Mr Lindsay’s redundancy deal are contained in council papers approved by Labour and Tory councillors at last month’s budget-setting meeting.

Mr Lindsay recommended that the department of the chief executive, which he ran, and the department of corporate finance and IT be merged.

This would allow a cut in senior officials from five to four. The post of “chief executive/director of the department of the chief executive”, which he holds, would go.

The pension and the lump sum are standard practice in local government and Mr Lindsay, with more than 40 years’ service, qualifies automatically.

However, under new redundancy rules – introduced in January by the personnel officers at the council, who are part of Mr Lindsay’s department – anyone taking voluntary redundancy is entitled to a payment of up to 66 weeks’ final salary.

The chief executive’s pay will rise to £103,536 a year in April so his voluntary redundancy pay-off will be £131,411, the first £30,000 tax-free. He is understood to be the first person at the authority to benefit from the new enhanced compensation.

Norman Murray, the authority’s Labour leader, told The Scotsman the payments were justified because there would be a £400,000 saving over four years.

Asked if the maximum 66- week payment would be made, Mr Murray, who is Labour’s candidate for the Edinburgh East and Musselburgh Holyrood seat, replied: “Yes, you are right. It is a short-term increase but in the medium to long term, it’s a big saving for council taxpayers.

“For us to slim down our management and make this saving, we have to make this post redundant and that means the chief executive’s department.”

Asked if the payment was justified as Mr Lindsay was eligible to retire on a substantial pension, Mr Murray said: “This is part of the Executive’s efficient government initiative.

“We wanted to reduce the numbers and this was the best way to do it. If he had just retired we would have had to advertise for a new chief executive and still have had the same number of departments.”

However, the SNP’s Kenny MacAskill, Mr Murray’s Holyrood opponent, said: “There is something rotten at the heart of East Lothian Council.

“With council-tax bills having rocketed and council workers facing pay restraint this sticks in the craw of workers and citizens alike. No wonder many saw some senior local-authority positions as sinecures.”

The payment has been greeted with incredulity by local government across Scotland. One senior figure said: “This is indefensible. It just stinks.”

A spokesman for the Convention of Scottish Local Authorities said appointments were a matter for individual councils.

Although the cut in senior officials was supported by both the Labour and the Conservative groups on the council – the one SNP councillor abstained – the paper Mr Lindsay submitted did not spell out his benefits.

Under the heading “formation of new corporate services department”, the paper – submitted by “Chief executive (per head of personnel services)” – says there would be an “initial substantial cost”.

In 2007/08 the net cost would be £62,000, it stated, adding this would be “more than offset” by estimated net savings from 2008/09 of £131,000 per year.

The paper, which was submitted under Mr Lindsay’s name, added that “allowing for the fact that £1 today is worth more than £1 in five years’ time, the proposal is worth an estimated £381,000 in savings.”

Last night Mr Lindsay, who has said he looked forward to walking, golf and travelling in his retirement, refused to comment.

He has been a local-government official since 1964 and can retire under the “rule of 85” as his age and length of service adds up to more than 85 years.

Mr Murray said the four remaining heads of department would be interviewed by councillors to fill the position of chief executive and the post would not be advertised externally. He added: “I am reasonably confident one of the four directors can take the council forward.”

• THERE are no rules governing potential conflicts of interests if council officers stand to benefit from recommendations they make to councillors, according to the Convention of Scottish Local Authorities.

The Scottish Executive has no powers to intervene in local authority personnel matters but in central government senior officials would be excluded from decisions that affected them.

A spokeswoman for the Executive said: “If jobs are to change as a result of efficient government, we expect that councils to use best human resources practice.”

However, the spokeswoman said that if a similar recommendation was made within the Executive – for example, abolishing a department and making its head redundant – Sir John Elvidge, the head of the Scottish civil service, would take the decision.

In the civil service, the head of the department concerned would be excluded from making proposals that affected him or her.