Harry Fone is grassroots campaign manager for the TaxPayers’ Alliance.
For as long as I can remember, the TaxPayers’ Alliance (TPA) has rallied against golden goodbyes to council bosses, particularly those that have done little to advance the cause of the taxpayer. Indeed our efforts were successful in bringing about a cap on exit payments of £95,000. Although sadly this was soon reversed – and yet again we’ve been waiting too long for a new, more legally watertight version of the policy to be introduced. Recent events at Northumberland County Council show exactly why it is urgently needed.
I’ve previously had my say on a Section 114 notice issued by the council’s finance officer to the now former council chief executive, Daljit Lally. I was shocked that such oversight could happen in the first place and called for the money to be paid back to the taxpayer. Just two weeks ago I was in the process of putting together a grassroots campaign on this very issue. However, as I was getting ready to put boots on the ground I received word that the taxpayer was set for yet another kick in the teeth – Mrs Lally was in line for a £209,000 payoff…
At an extraordinary general meeting (EGM) councillors would be asked to vote on this golden goodbye proposal. To my mind, this flew in the face of common sense and the TPA didn’t delay in reformulating our plans. It’s worth adding at this point that the meeting was likely going to take place behind closed doors. The press and public were to be barred as the “authority’s interest” would be “adversely affected” otherwise. The TPA firmly disagreed with this and I’m pleased to say that the decision was overturned. This potential lack of transparency must be challenged at every step and I hope other councils take note.
Documents released during the meeting revealed there were “long standing employee relations issues between the Chief Executive and the County Council”. That’s putting it mildly as Mrs Lally had submitted two employment tribunal claims against the authority. Furthermore, the advice of a QC acting on behalf of the council essentially argued that it was easier and cheaper to pay her off rather than fighting a series of battles in the courts. I completely understand the logic of this solution but is this morally right? It surely sends the wrong message. Effectively it says the council won’t pursue recovery of said unlawful payments – with £100,000 of £179,000 to be written off – and no further claims to be brought against Mrs Lally.
This was the subject of much debate among Conservative councillors as the blue-on-blue attacks ramped up in ferocity during the EGM. This whole saga has dragged on for far too long and many have been deeply affected, so much so that one member broke down in tears at one point in the four-hour-long session. Even the deputy leader looked visibly pained as he declared his vote in favour of the payout.
What’s even more interesting is that councillors revealed that Mrs Lally had rejected an initial payout of £1.1 million. This subsequently dropped to £625,000 as more facts came to light and eventually settled at £209,000 (although it’s actually a £309,000 cost to taxpayers when the write-off of unlawful payments is factored in) following the issue of a Section 114 notice. Perhaps adding insult to injury for local residents, the council has agreed to “provide Daljit Lally with a fair reference”.
In the end, the pay proposal passed by an overwhelming majority of 31 votes. Although it should be noted that 16 councillors did not attend and one was not allowed to attend the meeting owing to a conflict of interest with Mrs Lally regarding one of the aforementioned employment tribunals. From start to finish the whole process has done little to instil taxpayer confidence in the council. Let us hope that lessons really are learned and such a dreadful waste of the public purse never happens again.