Investigation into whether eight payoffs at Northumberland County Council were unlawful - including one for £570k

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Severance payments made to former council officers totalling millions of pounds of taxpayers’ money are under investigation amid fears they may be unlawful.

Officers at Northumberland County Council are looking into eight payments made to former employees between 2017 and 2022 either as part of a redundancy package or a mutual agreement to leave the authority.

Six of the payments, all made to unnamed officers, were more than £100,000 while two were £50,000 to £100,000.

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Speaking at a meeting of the the council’s audit committee, former council leader Peter Jackson said one of the payments amounted to a total remuneration package of £570,000.

Eight severance packages given to former council officers are being investigated as possibly unlawful.Eight severance packages given to former council officers are being investigated as possibly unlawful.
Eight severance packages given to former council officers are being investigated as possibly unlawful.

He said: “I think there was an awful lot more that needs to be looked at.

“Figures have shown that the exit payments paid by this council are some of the highest in the country. What it points to, to me, is that it is systemic.

“There is question marks about unlawfulness, and I would say that it veers into illegality. Some of these payments were made for a reason and one of them was in excess of £570,000 for a post that was actually not redundant.

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“£100,000 is the level that should have been reported to full council, and most of these were not.”

Stephen Watson, the independent chairman of the audit committee, warned Coun Jackson he was at risk of “writing the bottom line” too early, and that the monitoring officer and the finance chief would decide whether the payments were unlawful.

Coun Jackson replied: “A number of these payments were to do with payments of statutory officers. That should be reported to full council, and they were not.”

Former cabinet member Nick Oliver said another had been made just days before the government brought in a £95,000 cap on employee exit packages in December 2020.

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Coun Oliver, who was cabinet member for corporate services under Coun Jackson’s leadership, suggested that the council’s pay policy had been altered to allow the payments to go through.

He said: “We’re talking about millions of pounds of public money. What the report tells us is that there were some fairly significant failures.

“The pay policy of the council failed to keep up to date with legislation – it did, but a section was removed. I would be curious as to why that was removed and I have been asking the question as to whether it was removed deliberately.”

Coun Oliver also said that officers “disappeared” during his time as a cabinet member with no explanation offered.

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The council’s chief internal auditor, Kevin McDonald, said that any exit package paid to council officers over £100,000 should have gone to full council for approval. According to him, this had not happened in five cases and this constituted as a breach of the Localism Act 2011, which states that authorities should offer full council the opportunity to vote before large severance packages – advised as those £100,000 – are approved.

The council’s finance chief, Jan Willis, and monitoring officer Suki Binjal, are now considering whether or not those breaches are unlawful. If so, the council would have to issue a section 114 notice.

Ms Willis did so last year when payments regarding the council’s international healthcare consultancy business, Northumbria International Alliance, were found to be in breach of the Localism Act.