Harrogate council to review staff payouts which have cost £632,000 in two years

Harrogate Borough Council is to carry out a review into how it agrees staff payout packages which have cost taxpayers around £632,000 over the past two years.

Tuesday, 27th April 2021, 9:41 am
Updated Tuesday, 27th April 2021, 9:42 am
Pictured: Harrogate Borough Council's headquarters at Knapping Mount.

That is according to a report from independent auditors Mazars who have recommended a rethink on how payments including redundancy cash and compensation for loss of office are agreed for departing members of staff.

It comes after figures published in the council's annual statement of accounts showed £354,000 was paid out to 19 former employees in 2019/2020 - an increase from the previous financial year when £278,000 was agreed for 15 staff.

Mazars have warned the current process, which sees payments signed off by a monitoring officer, risks a lack of balance between "inappropriate expenditure" and "allowing ineffective employment relationships to continue".

They said any staff payout packages should require a final approval from elected councillors before they are made.

They said: "We encourage members to consider updating their risk management arrangements for employee settlement agreements to ensure that, for each case, members also approve payments after satisfying themselves that there is a clear rationale and payments comply with legislation, costs are minimised and available options have been considered."

In response, the council said in the report that it would carry out a review even though the current process already ensured there is a "clear rationale" for the payments which are "properly authorised".

It said: "Although the number of such cases has been small, and flexibility is sometimes needed to deal with them in a timely manner, the council will review its processes in order to ensure member involvement in future decisions."

The statement of accounts shows one member of staff received a £62,000 exit package in 2019/2020, although it is not known what job title they had or how much they were earning before they left their role.

The only member of staff who was named in the document was former director of community Paul Campbell who left suddenly last year and was paid £55,065 in compensation for loss of office.

Mr Campbell had an annual salary of £89,727 and oversaw a range of council services including emergency planning, housing, parks, waste and health and safety.

He has not been replaced since leaving 13 months ago and his responsibilities are being shared by other directors, the council previously said.

Nearby in York, the city council has been forced on the defensive after a report from Mazars said a £117,000 redundancy settlement to ex-chief executive Mary Weastell was paid unnecessarily.

The report suggests the authority wanted to avoid defending a tribunal claim which Ms Weastell dropped after the payout was agreed.

Mazars said the council paid out £24,884 in redundancy and a £65,779 ex-gratia payment, effectively a gift, neither of which were required.

The city council has defended the payments saying they were contractual obligations.

Exit packages agreed for departing staff between April 2019 and March 2020 - 19 (at a cost of £354,000)

Exit packages agreed for departing staff between April 2018 and March 2019 - 15 (at a cost of £278,000)

Number of exit packages totalling less than £20,000 - 20

Average cost of exit package for single employee in 2019/20 - £18,632

Average cost of exit package for single employee in 2018/19 - £18,533

These figures include compulsory and voluntary redundancy costs, associated pension costs and payments in lieu of notice.

In a statement, a council spokesperson said: “The council’s constitution currently provides for delegated approval by the monitoring officer for settlement agreements.

“Although the number of cases are relatively small, we will review the process in line with the audit recommendation.”

By Jacob Webster, Local Democracy Reporter