Caerphilly Council mulls settlements with head of legal and senior officer on leave for years

A Welsh council will this week consider whether to approve pay-offs for two of three senior officers – including its head of legal – who have been on leave on full pay for several years.

report published ahead of a meeting of Caerphilly County Borough Council tomorrow (31 October) says the local authority had reached a provisional agreement with Deputy Chief Executive Nigel Barnett and Head of Legal Services Dan Perkins.

In both cases, the cost of settlement would be less than the cost of continuing with the investigation, it suggests. Local press reports have indicated that both officers would be in line to receive a six-figure sum.

The report does not say what stage negotiations with the third officer on special leave, Chief Executive Anthony O’Sullivan, have reached.

The long-running saga dates back to two decisions of the council five years ago. One related to new pay structures for 20 senior managers at Caerphilly and the other in relation to the ‘buy-out’ of annual leave and essential user car allowances (affecting 43 and 40 officers respectively).

The Wales Audit Office subsequently found these to have been unlawful, saying there were failings in the decision making and governance arrangements in both cases. Caerphilly subsequently accepted the findings of the WAO’s two public interest reports.

The senior pay review matter was meanwhile reported to the police by one or more individuals. The three senior officers were later charged with misconduct in public office.

All three were suspended and at the request of the Avon and Somerset Constabulary, disciplinary investigations were postponed.

In October 2015 the charges against the three officers were dismissed.

The Leader of Caerphilly then referred a series of potential disciplinary issues against the three officers to the council’s Investigating and Disciplinary Committee (IDC).

The report for tomorrow’s meeting notes that all three were considered to be ‘Statutory Officers’ and any disciplinary matters therefore were governed by the Standing Orders Regulations (Wales) 2006. This statutory procedure has been withdrawn in England, but remains in force in Wales.

“This is noteworthy because the legislation removes the Council’s powers, as the employer, to impose any disciplinary action in relation to a statutory officer unless and to the extent that it has been recommended following a full investigation by a Designated Independent Person (DIP). This legislation is reflected in the disciplinary procedure adopted by the Council in relation to Statutory Officers,” it says.

The IDC agreed to continue with the suspension of the officers, although this was – following challenge – changed by mutual consent to special leave.

A preliminary investigator was appointed by the IDC to assist the committee with its deliberations as to whether any of the disciplinary issues amounted to a case to answer that required further investigation by a DIP. The investigator reported in September 2016.

The IDC in March 2017 decided that there were some disciplinary allegations in respect of each of the three officers which should be referred to a DIP for formal allegation. Many allegations considered by the IDC were dismissed.

“Members should be aware that the fact that the IDC concluded there was sufficient evidence to warrant an investigation by a DIP does not imply that anyone is guilty of any disciplinary offence and it is likely that all three officers would vigorously refute and defend the allegations against them,” the report notes.

It adds that the council had incurred more than £500,000 in legal costs over the 16 months it took for the preliminary investigation, and the employment costs of the three officers who were suspended, and then on special leave, amounted to £680,000 during the preliminary investigation. This was on top of £1.4m costs incurred during the period while Caerphilly was awaiting the outcome of the court case.

The report notes that the best indications were that the actual DIP investigation could take at least 12 months to complete.

“Given that it would be likely to involve the collection of much more detailed evidence, and from a much wider range of ‘witnesses’, than the preliminary investigation, it is possible that this anticipated timeframe could extend further. Moreover, if there were to be further legal challenges during, and possibly after the conclusion of the DIP’s investigation such as judicial review or claims for unfair dismissal and discrimination, it is difficult to assess with any certainty just how long the matter might yet take to determine to its final conclusion,” it adds.

The cost of employing the services of the DIP alone are expected to be in the region of £100,000.

If the settlements with Barnett and Perkins were agreed, then there would still be costs in engaging a DIP for the remaining case, but this was expected to be lower than if all three cases were proceeding.

The report continues: “This situation has been very costly and highly disruptive to the effective management and administration of the Council. There are numerous officers employed in an interim capacity, including the three senior posts of Chief Executive, Director of Corporate Services and Monitoring Officer. There are numerous ‘back-fill’ and temporary arrangements in the teams supporting these officers, and this is not at all conducive to effective running of a large council which is facing enormous financial and other pressures.”

The council’s legal advisors have included law firm Geldards, John Bowers QC of Littleton Chambers and Nathalie Lieven QC of Blackstone Chambers.

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