City of York Council’s Leader has been criticised in a public interest report by auditor Mazars over how former chief executive Mary Weastell came to receive a £377,118 pay off.
The report by Mark Kirkham, a Mazars partner, said that when Liberal Democrat Keith Aspden became leader in May 2019 Ms Weastell “began a period of absence and did not return to work”.
In February 2020 the council’s Staff Matters and Urgency Committee approved her request for retirement at a meeting chaired by Cllr Aspden.
The committee was told the settlement agreed with Ms Weastell was negotiated after she issued an Employment Tribunal claim that named the council and Cllr Aspden as respondents.
This claim referred to a series of events including “allegations of bullying and victimisation especially by Councillor Aspden”, which he and the council denied.
Mr Kirkham said this involved “alleged detrimental treatment followed an investigation that was commissioned by the chief executive in response to complaints she had received in March 2017 which included allegations about a series of breaches of the council’s Code of Conduct by Councillor Aspden in connection with a recruitment matter for another person”.
An independent investigator had then concluded that Cllr Aspden used his position improperly to obtain an advantage for an applicant.
York’s Standards Sub-Committee though did not agree that Cllr Aspden had a close association with the person involved and no sanctions were imposed.
Ms Weastell was eventually offered the £377,118 package but Mr Kirkham said he had “not seen clear evidence that the council considered the arrangement and the ex-gratia payment to be in the interests of taxpayers”.
It had been put to the committee that the cost of defending a tribunal action would be significantly larger.
But the report said: “A local authority should not enter a settlement agreement simply to avoid embarrassment to the authority or individual elected members, or the cost of defending proceedings.
“It is only where there is a risk that a claim has a reasonable chance of success that it may be compromised. The business case [for the payment to Ms Weastell] refers to potential legal costs of contesting the Employment Tribunal claim but we have seen no clear evidence that demonstrates members challenged the limited information provided, or asked about the source of the estimate, or considered other options.”
Termination of Ms Weastell’s contract was marked by “ambiguity in the nature of the severance…accompanied by a lack of transparency and objectivity in approving the discretionary elements of the agreement”. Several Nolan principles were breached, Mazars found.
The report said some committee members may not have been informed that Cllr Aspden was a respondent in the Employment Tribunal claim and were, “therefore, unaware of that aspect of the conflict of interest”.
It went on: “We can reasonably expect, however, that they would have been aware of the earlier investigation arranged by the chief executive and might, therefore, have been sceptical about the propriety of the decision to approve an incomplete business case during a meeting [Cllr Aspden] chaired.”
Mazars said the failure to manage the conflict of interest “arguably means that the discretion involved in approving the severance has not been properly exercised”.
It said there had been several cases of conflicts “that have led to audit action or media coverage in recent years”, which suggested “a pattern or evidence of systemic weakness”
A review in progress of York’s constitution should be used to clarify how self-interest risk are managed, it said.
It made a number of other recommendations to improve processes and decisions recording.
Ian Floyd, the council’s chief operating officer, said: ‘We have developed an action plan to deliver each of the recommendations made by the auditor and this action plan will be considered at the same time as full council considers the Mazar’s report in May.”
Cllr Aspden said he relied on advice from council legal officers concerning any conflict of interest at the meeting about Ms Weastell’s payment, which “on this occasion was that there was no pecuniary or financial interest to declare on the specific decision being made”.
He said York’s code of conduct said councillors did not have a prejudicial interest in any council business where this “does not affect your financial position”. He would have been indemnified had he and the council lost the tribunal case.
Cllr Aspden said: “We know that there is certainly more that can be done at City of York Council to improve upon governance arrangements and, more widely, bolster existing processes.
“Work has already started to address this, including the new director of governance role and investment to update the council’s constitution. The action plan will complement the work already underway and must include creating a revised constitution, a new model code of conduct, template reports and decision logs.”
He said the deletion of the posts of chief executive post and one council director saved some £200,000 a year which would “be invested back into taxpayers’ priorities, not just as a one-off, but annually”.