Pembrokeshire County Council is to take no further action on a highly critical audit report into how it came in 2020 to make an unlawful termination payment of £95,000 to chief executive Ian Westley.
A report by the Auditor General for Wales, Adrian Crompton, said the payment was sanctioned by council leader David Simpson and concerns were soon raised as it was “unclear of the basis on which the then chief executive was leaving his employment; the reason why he was to receive a payment of £95,000; and how decisions in respect of these matters had been made by the council”.
The decision on the payment was incorrectly taken as an executive decision “and, in my view, the payment was contrary to law”.
Last week’s council meeting resolved to take no further action on the payment and to accept the auditor’s recommendations for governance improvements, having rejected the options of either rescinding or ratifying the payment after advice that both courses would threaten further legal issues.
A Pembrokeshire spokesman said: “The auditor general acknowledges that the council has established a wide-ranging and ongoing improvement programme and has taken action to improve its governance and decision making.
“Progress on improvements will be reported regularly and continue to build on the result of both internal and external reviews previously commissioned by the council.”
Mr Crompton said in his report: “The audit has been complex, made more difficult by the failure of the council to contemporaneously document the basis on which decisions were made.
“Furthermore, those interviewed sometimes held very different recollections of the same events.”
This meant it had proven impossible to reach a definitive conclusion on the circumstances that led to Mr Westley being offered a termination payment if he left.
There was though “a consensus that one of the factors that led to the chief executive’s departure was that relationships between him and some members of the council’s cabinet were, at the very least, strained”.
Mr Crompton said he had concluded the process that led to the payment was “an example of a serious breakdown in governance”.
He had found “a failure to address and resolve relationship difficulties between members and officers, lack of clarity on respective roles and responsibilities, examples of officers failing to properly discharge their professional duties, disregard of external legal advice, failure to follow internal policies and procedures, poor and untransparent decision-making, failure to document and report the reasons for decisions, members of the council not being given the opportunity to review and scrutinise the proposal, and failure to comply with legislative requirements”.
This meant Pembrokeshire had “much work to do to satisfy itself that it has robust governance arrangements in place and that these arrangements are being complied with”, he added.
Mr Crompton found that once the payment to Mr Westley was agreed “the council’s head of human resources instructed external legal advisors to draft a settlement agreement…but the instructions were not based on established facts.
“The council’s external legal advisors advised the council’s head of human resources to clarify and document the basis on which the then chief executive was leaving…but the head of human resources did not act on this advice”.
External legal advisors prepared a draft settlement agreement but Cllr Simpson instructed the wording should be amended “resulting in the council being exposed to a potential tax liability”.
Mr Crompton added: “There was a general lack of clarity regarding who was advising who in the legal negotiations around the settlement agreement, and this was compounded because the head of human resources shared the council’s external legal advice relating to the departure of the council’s then chief executive with him.”
He said the head of legal and democratic services raised a concern with the monitoring officer that the proposed payment might be contrary to the council’s statutory pay policy statement, but this was not addressed “and the council appears to have deviated from its pay policy statement without being able to demonstrate good reason for doing so”.
This is the second time in less than a decade that Pembrokeshire has been in trouble with auditors over payments to an outgoing chief executive.
In October 2014 auditors withdrew an advisory notice that had stopped a payment to former chief executive Bryn Parry Jones.
This had been imposed after initial concerns that the council was about to enter into the agreement worth a reported £330,000 that would incur unlawful expenditure. The lower revised settlement of £52,760 was later permitted.