Process that led to a departure payment to the Chief Executive of Pembrokeshire County Council represented a serious breakdown in governance
The Council has taken action to improve its governance and decision making though much work is still needed
Issues found in the Auditor General for Wales’ report in the public interest included failure to address and resolve relationship difficulties between members and officers, disregard of external legal advice, failure to comply with legal requirements and poor and untransparent decision making.
On 2 September 2020, Pembrokeshire County Council announced that its Chief Executive would be leaving his employment by mutual consent. Under the terms of a Settlement Agreement, the Chief Executive received a termination payment of £95,000 and his employment ended on 30 November 2020. The Auditor General carried out an audit examining the circumstances that led to the Chief Executive’s departure and the decision-making process that led to the Council making the termination payment.
The report found that the Council failed to properly record the reason for the Chief Executive’s departure and why the Chief Executive was to receive a termination payment. The decision-making process the Council followed, as well as failing to comply with legislation or their constitution, led to a payment likely to be contrary to law.
Significant and numerous governance deficiencies were found in the way the Council dealt with the termination payment to the former Chief Executive. These include:
- A failure to address and resolve relationship difficulties between members and officers
- Lack of clarity on respective roles and responsibilities
- Officers failing to properly discharge their professional duties
- Disregard of external legal advice
- A failure to follow internal policies and procedures
- Poor and untransparent decision-making
- A failure to document and report the reasons for decisions
- Members of the Council not being given the opportunity to review and scrutinise the proposal
- Failure to comply with legislative requirements
Whilst the report findings are based solely on matters relating to the Chief Executive’s departure, action is needed by the Council to provide the public with confidence that its governance arrangements are sufficiently robust to prevent similar failings occurring in the future. The report makes several recommendations relating to areas of governance that the Council needs to address, including recommendations around roles and responsibilities, member/officer relationships, decision-making, termination payments, the Council’s pay policy statement, procurement, the use of external advisors, the Council Constitution and the need to ensure adherence to the Nolan Principles of Public Life.
Further improvement is still needed, however, the report recognises that the senior officers at Pembrokeshire County Council have acknowledged the seriousness of the report findings and have put in place an ongoing improvement plan, as well as taking action to improve its governance and decision-making.
Failure to put in place effective governance arrangements and/or to comply with the arrangements that have been established can have serious consequences and undermine public trust in an organisation. Pembrokeshire Council has work to do to ensure that its governance arrangements are sufficiently robust and to regain public trust. However, the steps the Council has since taken to improve its governance and decision-making processes, and the leadership already provided by its new Chief Executive, gives me confidence that the Council will act on the recommendations in my report.
I hope that other public organisations will take note of the report and consider whether it holds lessons from which they can learn.