Watchdog slams "unlawful" decision by council on pay of senior officers

A decision by a Welsh council’s senior remuneration committee to approve a pay structure for chief officers was unlawful on a number of grounds, the Assistant Auditor General in Wales has said.

In a public interest report, Anthony Barrett, the Appointed Auditor for Caerphilly County Borough Council, said he had uncovered significant failures in governance arrangements and inadequacies in processes.

He examined the local authority’s actions in increasing the pay for its most senior staff at a meeting in September last year (a decision that was later rescinded).

The decision would have seen, amongst other things, the chief executive’s pay rise by £27,000, according to the BBC.

Barrett said: "I believe it is important that the public has full and proper awareness of the events concerning Caerphilly County Borough Council. I also consider it appropriate to give the council the opportunity to explain the important steps it has taken to improve arrangements and to ensure the risk of such failures recurring is reduced to a minimum.

"I have concluded that the decision by the senior remuneration committee on 5 September 2012 to approve the pay structure set out in the report of the chief executive was unlawful on a number of grounds.”

Barrett concluded that:

• the meeting of the committee was not properly advertised in accordance with the Local Government Act “and neither were agendas for the meeting made available for public inspection as they should have been”;
• certain officers, including the chief executive, “who would have been (and indeed were) beneficiaries of the decision” were present at the meeting to approve the salary increases. No declarations of interest were made and the officers did not leave the room while the decision was made. “Consequently they participated in the decision making process when they had a disqualifiying financial interest”;
• the report presented to the committee was written by the chief executive “who was himself a direct beneficiary of the decision made and who gave advice on a matter in which he had a financial interest”; and
• the report did not consider the full range of options identified. “Nor was there any detailed and explicit consideration of these options in the meeting of the committee."

The Assistant Auditor General added: "I do consider much can, and indeed should, be learnt in respect of the processes followed by the senior remuneration committee. Council officers have indicated to me that they accept that there are lessons to be learned."

A spokesman for Caerphilly said: “We are currently reviewing the recommendations contained in the report. It is important to stress that the decision of the senior remuneration committee was rescinded at a meeting of full council on 17 January, where independent external legal advice was received and a new decision was reached.”

He added: “The Wales Audit Office report will be considered at a meeting of full council in due course, so it would be inappropriate to comment further at this stage.”