The decision to let Cumbria County Council’s Chief Executive take early retirement proved highly contentious. We now have the official minutes of the meeting where the decision was made. Sensitive material was redacted (“placed in Part 2” in council-speak), but it still made interesting reading, as I pointed out today in my speech to full Council:
Thank you Chair.
I would like to present to members the Minutes of the Chief Officers’ Panel which took place on Tuesday 23rd April. This was the meeting which approved the Early Retirement of the Chief Executive. You may remember this decision caused some excitement in the media at the time. Now that we have the official minutes on the Council website, I thought it would be useful to take members through what we now know about the decision.
The minutes tell us that the Panel was supported by an impressive array of officers. The intellectual heavyweights, the confidential and trusted advisors you would want in the room when making a sensitive and controversial decision.
The minutes tell us the officers presented their reports: Part 2 material, not in the public domain. After they had said their piece, the confidential and trusted advisors were then asked to leave the room. Twenty minutes later, they were invited back into the room, to record the Panel’s decision.
So what do we know about the decision. There was talk in the press at the time that the Council had to let the Chief Exec go. The minutes make it clear that this was not so. The Chief Executive had requested early retirement in the interest of efficiency of the service (ERIES). Under the Council’s policy for ERIES, it is entirely at the discretion of management. The Panel had every right to say no.
However, once they said yes, then there was an immediate and inevitable cost to the Council, to cover the ‘actuarial strain’ on the pension scheme. There’s a mathematical formula for it – it’s non-negotiable. Talk in the press about ‘golden goodbyes’ was therefore incorrect.
ERIES. The Panel is trying to save the Council money. What the minutes then show is that the Panel also agreed a further payment in lieu of notice. This again is discretionary – the Chief Exec could simply have worked her notice, taken her holidays, and it wouldn’t have cost a penny extra. The Panel told us they were trying to save the Council money – but they incurred extra costs, just to get the Chief Exec go early.
Because ERIES is expensive, the Council has strict rules to make sure that the cost is justified. Section 4: Before any application for early retirement or voluntary redundancy is approved, the full additional estimated cost of the termination must be shown to be recoverable within three years of the employee’s termination date.
The minutes do not record whether this cost was considered, so I asked for a Section 151 conversation (as any member is entitled to). Were the full costs written down for the Panel? They were. Was there an itemised plan for recovering the cost in 3 years? There was not. Various possibilities were discussed, but there was no costed plan for achieving the savings.
And indeed, it would have been strange to have had a plan. We were nine days away from an election. The Chair of the Panel had already announced he would be standing down, and none of the other Panel members could guarantee they would be in post for the next three years. So realistically, there was no-one there who could sign up to delivering a savings plan – assuming there had been one to sign up to. But ERIES policy says you must not approve the early retirement, unless you can guarantee the savings.
The Panel also considered guidance from the Secretary of State: “Authorities should … offer full council … the opportunity to vote before large severance packages … are approved for staff leaving the organisation. … In presenting information to full council, authorities should set out clearly the components of relevant severance packages … salary paid in lieu, redundancy compensation, pension entitlements, holiday pay and any bonuses, fees or allowances paid”.
The Panel agreed this advice was “not mandatory” and “that details of the proposed severance payment, should not be reported to full Council on this occasion”.
The minutes also record that “both parties [agreed to] enter into a legally binding compromise agreement setting out the agreement reached” – this was the so-called “gagging order” referred to in the press.
So, why does this matter? It matters, because in about one year’s time, all the financial details which been buried in Part 2 must be published in the Council’s accounts. You can be sure they will be pored over in detail by the press and public. I can hear it now: “You’re on the Council – how did you let this happen? What have you been doing about it this last twelve months?”
Fellow councillors, it’s a ticking time bomb under this Council. And the beauty of it is this. Because of the timing, we’re all implicated – either as part of the previous administration, who made the decision, or as part of the new one, which has to implement it.
Because we will have to answer the questions: “Why does the Council employ highly paid experts, and then shut them out of the room?” “Why did the Panel not do the obvious thing – leave the request to the new Council, which could guarantee the savings, which could bring the matter to full Council as per the Secretary of State’s guidance?” There might even have been time for the Chief Exec to take her holidays and work her notice, saving the Council a bob or two.
Good questions. Fellow Councillors – return to your divisions, and prepare your answers. You have about twelve months.
Thank you Chair.
Unfortunately, there are few powers available to councillors to investigate further, or hold a previous administration to account. The jury is out on whether recent changes to the UK’s legislation around whistle blowing will encourage disclosures in the public interest or not.