Caerphilly bosses’ pay move ‘unlawful’ - watchdog
12:10am Wednesday 6th March 2013 in News
THE way huge pay rises for Caerphilly’s top bosses, proposed and recommended by main beneficiary chief executive Anthony O’Sullivan were decided was "unlawful", a watchdog says today. CHRIS WOOD reports.
PAY rises of up to 20 per cent for top officers, which prompted hundreds of council staff to walk out in disgust, were "unlawful" in the way they were set, a damning Wales Audit Office report says today.
It blasts the local authority for "failures", "inadequacies" and acting "unlawfully" in determining the rises which will cost it £1.5 million over the next four years.
The rises were awarded by a five-man committee including both the local authority’s deputy leaders based on a report written by chief executive Anthony O’Sullivan - who gave advice leading to his £32,000 increase.
This was later reduced to £5,000 following an outcry from unions and staff, many of whom have had their pay frozen for three years.
But, the rises for 20 top officers will still cost the authority £1.5 million over the next four years even after the original decision was rescinded and a compromise position agreed by full council.
In the document published today, assistant auditor general Anthony Barrett says the original decision was unlawful "on a number of grounds".
The first was that chief executive Anthony O’Sullivan, who wrote and would be a beneficiary of the proposal, sat in on the meeting to approve salary increases.
Other officers who were in line to gain from it - head of legal and governance Dan Perkins and head of human resources Gareth Hardacre, were also present.
In the report, Mr Barrett said: "No declarations of interest were made and these officers did not leave the room while the decision was made.
Consequently, they participated in the decision-making process when they had a disqualified financial interest."
The decision was made as part of an exempt item during a senior remuneration committee meeting on September 5 last year. Mr Barrett said the meeting was not properly advertised, with agendas not available for public inspection as they should have been.
The committee, which has since been disbanded, was chaired by St James councillor Christine Forehead, and included the council’s deputy leaders Gerald Jones and Keith Reynolds, plus fellow Labour councillor David Poole.
St Martins’ James Fussell was Plaid Cymru’s sole representative on the panel, the council's own agenda to the September 5 meeting says.
Mr Barrett says the minutes of the meeting are brief, with no adequate record of the discussions that took place or if the decision was unanimous.
He notes the fact the Cllr James Fussell claims he voted against the proposal, something disputed by the four Labour members, with this matter being looked into by the Public Services Ombudsman for Wales.
The report also says one committee member - not named in the WAO report - had told the WAO that officers had left the meeting while their recommendation and decision was debated. "This version of events was not borne out by others present," the WAO report says.
Caerphilly council must now consider the report at a full meeting within a month, where it must decide if action is necessary.
The report recommends in future all meetings are properly advertised, any conflicts of interest looked into, procedures clearly set out, with sufficient records kept.
Call for council boss to go
The opposition Plaid Cymru group on Caerphilly council is calling on Mr O’Sullivan to resign, calling his position "untenable".
Its leader Colin Mann called the situation "embarrassing", adding: "This whole episode begs the question, who runs Caerphilly, Labour or the council’s chief officers?"
Cllr Mann added: "The auditor’s damning dossier makes the position of the chief executive untenable. We have a situation in Caerphilly where the chief executive authored recommendations, advised on recommendations and benefitted from those recommendations."
He added that Cllr Fussell voted against the increases, saying: "He recognised it was very difficult to justify in the present economic climate."
‘Decision can’t be reversed completely’
Labour spokesman, St Cattwg councillor Hefin David said the group discussed the issue collectively for the first time on December 18, deciding to rescind the original decision based on independent legal advice.
He said it was not possible to reverse the decision completely, because this would have led to "industrial disputes with senior officers, huge legal costs and greater reputational damage to the authority".
However, he said steps were taken to address the situation ahead of the WAO report, with full council making "a fresh decision" on January 17 to reduce Mr O’Sullivan’s level of pay increase.
Cllr David said Cllr Fussell voted in favour of the proposal, adding: "The Labour leadership publicly apologised in December for the original pay decision and for that they deserve credit. The hypocritical Plaid leadership have yet to apologise and it is time that they did."
Affair was handled in ‘cack-handed manner’
LIBERAL democrat leader in Wales Kirsty Williams said councils must be open and transparent about how they make decisions.
She said: "Making decisions in a small clique of councillors without further discussions and further consultation is bound to lead to the reaction we saw from people in Caerphilly."
Welsh Tory leader Andrew RT Davies said Caerphilly council handled the situation in a "cack-handed manner" and must explain itself for pay rises he described as "absolutely ridiculous".
He added: "Ratepayers have a reasonable expectation to make sure their money is spent wisely and correctly. I don't believe it was a sensible proposition that Caerphilly council made."
Shadow minister for local Government Janet Finch-Saunders AM said: “These were already well-paid senior executives at Caerphilly council awarding themselves bumper pay increases at a time when many lower-paid council workers and hard-pressed taxpayers in Caerphilly were facing a freeze in their own salary."
She added there are "major lessons to be learnt" to ensure "no such scandal can happen again".
A spokesman for Caerphilly council said it is reviewing the report's recommendations.
He added: 'It is important to stress the decision of the senior remuneration committee was rescinded at a meeting of full council on January 17, where independent legal advice was received and a new decision was reached."
With the report set to be discussed by full council, he added: "It would be inappropriate to comment further at this stage."
ARGUS COMMENT: Caerphilly council's competence questioned
WE already knew a secretive deal to give senior officers at Caerphilly council massive pay rises was a scandal.
But today we learn it was also against the law.
The decision to award huge pay hikes to the council’s leadership team caused outrage last year.
The move led to more than 600 council workers walking out in protest and caused a massive political row.
Today the Wales Audit Office gives its verdict on the issue – and it is damning.
The WAO says holding the meeting that decided on the pay rises without informing the public it was happening was unlawful.
It says not making the agenda for the meeting public at least three days before the meeting was unlawful.
It says the fact senior officers who would benefit from the pay rises sat in on the meeting, without declaring an interest or leaving when the issue of their own salaries was discussed was unlawful.
It is critical of the fact that the report that recommended the pay rises was written by council chief executive Anthony O’Sullivan – the person who would benefit from the biggest increase.
Changes have been made since, although many officers are still receiving significant pay increases. But the WAO report raises many questions about the competence and probity of those running Caerphilly council – the very people who decided how to spend your council tax.