“Increasingly complex” disciplinary and grievance proceedings to result in almost £700k rise in estimated legal spend for council, finance director report says

The cost of external legal advice in ongoing disciplinary and grievance proceedings at Thanet District Council has risen from an initial spend of £40,000 to an estimated total cost of between £697,000 and £733,000, a report from the local authority's Director of Finance has revealed.

The appeal for retroactive approval of the costs is to be made at an extraordinary Cabinet meeting next week and comes at a time when the council's finances are in a "delicate position" following the impact of the pandemic, according to the report.

External advice was first sought in March 2020 when a law firm was contracted at the cost of £40,000. By July 2020, this estimate rose to £50,000. In a January 2021 budget monitoring report, the legal costs were said to have led to an £86,000 overspend for the council's 2020-21 financial year.

But additional matters and other claims being lodged have resulted in the three-figure sum cited in the most recent June 2021 report.

"Costs incurred to the end of May 2021 relating to the ongoing disciplinary and grievance proceedings total £247,000 (of this £141,515 relates specifically to 2020-21)," the report reads.

"Future potential costs are estimated to range between £450,000 to £486,000, resulting in total legal costs forecast to conclude these matters being between £697,000 and £733,000."

According to the Director of Finance, Chris Blundell, it is not clear how the council will pay the already incurred legal costs.

Mr Blundell said: "At this time it is not possible to specify what the exact financing source of the £247,000 for costs to date will be, but inevitably will need to be financed from our limited earmarked reserves. This will be a challenging task to identify available funding, particularly in light of the requirement to allocate £3m of earmarked reserves within 2020-21 to address the financial impact of Covid."

The legal firm overseeing and managing the proceedings was selected because of its expertise in dealing with constitutional and local government employment issues, the report says.

The firm produced the estimates for the legal costs, basing them on the maximum time and processes necessary to bring matters to a conclusion. The forecast includes the legal firm's costs, but also those of external investigators and counsel.

Mr Blundell noted that the forecasts represent the council's costs only and "therefore there is a risk that the Council's financial exposure could exceed this envelope".

He added: "There is also a risk that costs may exceed these current estimates if the proceedings' durations extend beyond current expectations or if appeals are lodged."

Adam Carey