Spending Watchdog Condemns Council’s £149,000 Redundancy Deal For Chief Exec

Politicians and council officials have been condemned by Scotland’s spending watchdog over a plan to hand a local-authority chief executive a £149,000 redundancy payment just months before he was due to retire.

Audit Scotland found East Lothian Council “fell a long way short of the standards expected of public bodies” in its handling of the proposed pay-off to John Lindsay. In a damning indictment of the council, Caroline Gardner, the controller of audit at Audit Scotland, found a series of serious flaws in the way the authority, then under Labour control and led by councillor Norman Murray, had agreed the pay-off.

Her eight-page report, which will be discussed today by the Accounts Commission – the statutory body that oversees councils – does not pull its punches. It revealed the document that set out the proposal to make the chief executive redundant was tabled only an hour and a half before the authority’s meeting in February to set the council tax. She said such short notice for an important decision was “entirely inappropriate”.

The failure publicly to advertise for his successor also contravened the council’s standing orders, Ms Gardner said – a claim disputed by council officials – and went against Accounts Commission guidelines.

Ms Gardner also cast doubt on the standards applied in the selection of Alex McCrorie to replace Mr Lindsay, 59. Mr McCrorie, who was the council’s head of finance, was picked from a shortlist of just two internal candidates. Ms Gardner said “openness and transparency must apply to everyone in local government”.

She revealed that documentation on the plan was “sparse”. The redundancy had never been formally discussed by senior officials or politicians until the main council meeting, when it was backed by Labour and the Tories.

Mr Lindsay and Mr McCrorie – who is now acting chief executive – told Audit Scotland that tabling the report in the name of the chief executive but through the personnel department had distanced them from a decision from which they could benefit.

However, Ms Gardner said: “In my opinion, this was insufficient and they should have declared an interest and taken the steps necessary to demonstrate the highest standards of openness and transparency.”

Her report also cast doubt on claims made by Councillor Murray that there would be savings of nearly £400,000 from the redundancy, which would lead to the number of senior officials being cut from five to four.

She found that the process “did not meet the standards expected of good governance and best value” for the council taxpayer. Ms Gardner added: “Having carefully considered the circumstances and available evidence, in my view, the process by which the council made its decision fell a long way short of the standards expected of public bodies.”

Her report revealed the actual figure for Mr Lindsay’s proposed redundancy payment – which he is now unlikely to receive – was about £149,000, not the estimated £130,000 reported previously.

The chief executive put his name to the recommendation of his redundancy, despite the fact he could have retired within months, with a pension of at more than £50,000 a year and a lump sum of more than £150,000.

Last night, it appeared the Audit Scotland report could lead to the council rescinding Mr McCrorie’s appointment and advertising for a chief executive.

The new SNP/Liberal Democrat council is considering legal advice on the redundancy and on Mr McCrorie’s appointment. But Michael Russell, an SNP MSP for the South of Scotland, said: “It is absolutely essential that the job of chief executive is readvertised.”

David Berry, the SNP leader of the council, said: “We are considering senior legal opinion in relation to the proposed redundancy payment and related matters and will a make a further statement on this as soon as possible.” He said that, “hard-hitting” as the Audit Scotland report was, the council “broadly accepted” the findings on the conduct of the previous administration.

Mr Berry added: “The new council’s ruling administration was elected on a promise to be more open and transparent in its decision-making, to provide good governance and to demonstrate best value. We owe it to our residents and our employees to make good on that promise, by learning from this experience.”

Mr Lindsay refused to comment last night. Mr Murray, who took a £20,000 payment to stand down as a councillor, was unavailable for comment.