Payment to departing council chief executive “unlawful”

A report by the City of York Council’s auditors Mazars, states that a severance package to the council’s former chief executive, Mary Weastell was not properly approved and “is arguably an unlawful payment”.

The report highlights that the council paid the former chief executive £117,828 more than it was contractually obliged, with this figure including £24,884 in redundancy and a £65,779 ex gratia payment. It adds that there is no evidence that the “redundancy element was a statutory or contractual obligation, or that the post was deleted when the severance agreement was approved”.

In addition the report highlights that the council paid Weastell a full salary for the 11 months and 16 days during which time she was off sick, and that this should have been reduced to half pay after six months. The auditors added that one explanation of  this was that Weastell “indicated she intended to return to work after 6 months” but that evidence seen by Mazars “makes it clear this was not the outcome that the council wanted”.

Although the council states the payments made were contractual obligations, the auditors suggest that this is not the case and cautions with regards particularly to the ex gratia payment that a “local authority should not enter a settlement agreement simply to avoid embarrassment to the authority or individual elected members, or the cost of defending proceedings.”

Implying that this payment was made to avoid the council having to defend a tribunal claim which Weastell had made regarding “bullying and victimisation”,  a claim subsequently dropped after the payout was agreed.

The report adds that: “In the termination of the Council’s chief executive’s employment contract, ambiguity in the nature of the severance was accompanied by a lack of transparency and objectivity in approving discretionary elements of the agreement.”

The report recommends that:

• The Council should adopt and apply appropriate standards for business case preparation in relation to exit and pension discretions to improve information supporting decisions
• Decision notes should be maintained that document the factors that explain the case for the use of public funds under the scheme of delegation such as where payments exceed contractual entitlements
• The Council should review the design of its governance policies and procedures to manage conflicts of interest (including self-interest threats). This should include updating the Council’s constitution and scheme of delegation
• The Council should ensure all Members fully understand the requirements of the Code of Conduct in relation to declaration of interests
• The Council should review its policies and procedures to reflect Government guidance in the use of non-disclosure agreements

Ian Floyd, chief operating officer at City of York Council responded to the report stating: “Following the recent publication of Mazars’ report, I would like to thank the auditor for his work and fully accept the recommendations in the report.

“We have developed an action plan to deliver each of the recommendations made by the auditor and this action plan will be considered at the same time as Full Council considers the Mazar’s report [on 4 May].

“The council will deliver these recommendations as soon as possible and I am committed to ensure we further strengthen governance within the council.

“Moving forward we continue to focus on responding to the pandemic, ensuring a strong recovery for York by delivering on the priorities of residents and businesses.

“It is important the recommendations are acted upon, and equally important the Council continues to focus on recovery, given the impact the pandemic has had on residents and businesses.”

Council leader Cllr Keith Aspden added: “We know that there is certainly more that can be done at City of York Council to improve upon governance arrangements and, more widely, bolster existing processes.”

He also noted the council has made “significant savings in senior management costs”.

“By deleting the chief executive post and a director post, along with other senior management roles, this administration has saved taxpayers more than £200,000, every year, moving forward.”