Agenda item

This report presents guidance prepared for consideration by the Audit & Governance Committee relating to the use of settlement agreements including special severance payments. 

The Committee considered the report and the proposed ‘Exit Strategies Guidance on the use of Settlement Agreements

including Special Severance Payments’. Officers noted the new proposed Exit Strategy guide in relation to the Action Plan following the Public Interest Report (PIR) and noted that if agreed by the Committee then it would be referred to consider the adoption and implementation of the strategy.

Members enquired about the reference to Chief Officer in the proposed Exit Strategy, noting that further clarification could be given to identify who classified as a Chief Officer in relation to the strategy. Officers confirmed that Chief Officer would include Assistant Directors, Directors, Corporate Directors, and the Chief Operating Officer. It was also noted that in the case of the exit of a statutory officer such as the Monitoring Officer or the Section 151 Officer, reciprocal arrangements had been made with North Yorkshire County Council to ensure the Council would be supported. Members also noted that redundancy wasn’t included in the strategy which was confirmed would be added. 

Financial considerations when deciding on tribunals and the possible use of special severance payment were highlighted as requiring evidence of best value for money and Members enquired whether this would include independent legal advice. It was confirmed that the Chief Legal Officer would perform their function to provide legal advice to the Council, but would often seek independent legal advice which would be legal advice owned and presented by the Chief Legal Officer. The Committee discussed whether the Council should have to seek independent legal advice in relation to any exit agreements with Chief Officers. The role of Internal Audit was raised and whether their opinion should always be sort when determining value for money.

The options on when to settle and what criteria for a settlement were raised and officers noted some of the challenges of a criteria due to each case being unique. It was noted that it can be challenging to identify the full costs related to an exit due to potential future costs, however, it was noted that the Section 151 officer would consider a whole range of costs when determining value for money. Members also enquired about whether actions could be taken in cases where the Council accepted mistakes, prior to a tribunal and appeal. Officers confirmed that this would be the case and could be made clearer within the proposed strategy.

The Committee also discussed how the new proposed exit strategy could address issues highlighted in the PIR as part of its rule in the Action Plan. Members enquired about whether the new strategy would ensure any payments could not be described incorrectly for when Members considered any exit payments and whether the new business case would be clear enough to ensure it avoids errors. Officers confirmed changes should create further clarity, for instance in the business case document it was noted further information would be required to ensure better decision making. The Committee requested therefore that the old strategy and business case document be shared with the Committee and Staffing Matters and Urgency when the Committee considers them to compare changes in policy.

Members also discussed training regarding any changes to the Exit Strategy and the use of documents in relation to these. Officers confirmed that a range of new training would be made available to Members, with an aim to improve Member training across the Council. In relation to those that could use the proposed strategy early training would be put in place should the new strategy be adopted to ensure Members were prepared for meetings it could be required in.