Northumberland County Council payments of over £1m deemed unlawful, internal inquiry finds

An investigation has found that a total of £1,068,801.98 paid out between May 2017 and May 2022 did not have the proper authorisation. Credit: ITV Tyne Tees

An internal inquiry has found that six pay-outs to former council managers costing over £1 million were unlawful.

Northumberland County Council made exit payments to six managers between May 2017 and 2022 which did not have proper authorisation, the council's internal audit team has said.

A total of £1,068,801.98 was paid out during this time to a range of senior level roles, including to the director of adult social care, and the chief information officer.

The findings follow months of investigation by council officer Jan Willis and the internal audit team.

The investigation was commissioned after alleged unlawful expenditure was identified in relation to the council's international health consultancy business.

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.

A provision detailing these rules in the council's pay policy was removed "for reasons that are unclear" between 2019 and 2022, Ms Willis said.

As a result of the omission, five exit payments above £100,000 were not subject to appropriate scrutiny and have been deemed by Ms Willis to be unlawful, while a further payment made to a former monitoring officer was not considered by councillors despite the fact it should have been, according to government guidance.

The unlawful payments identified were:

  • Commissioning and Finance Manager - £135,603.50

  • Short Term Support Service Manager - £110,452.98

  • Service Director Adult Social Care - £435,968.39

  • Legal Services Manager - £72,434.50

  • Revenues Manager - £166,151.66

  • Chief Information Officer - £138,190.79

Ms Willis said the payments were made in accordance with the scheme at the time and four were signed off by senior managers.

In mitigation, there was "confirmation" that the two-year "payback period" - the time taken for the savings made by making the officer redundant to break even with the cost of the pay-out - would "be achieved".

Ms Willis said she looked to establish an evidence trail as to why the payments were made, who approved them, whether alternatives were considered and how making the payments represented "best value" to both the council and the taxpayer, but the trail was "mostly absent and opaque at best".

She said she was satisfied measures were now in place to minimise the risk of the issue reoccurring and the council had taken legal advice which concluded that there were no "good prospects" of recovering any of the money paid out.

The report will be debated by members of the audit committee at a meeting on Wednesday 26 July.

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