£280,000 going....going...GONE. The cash paid by combined authority to settle with former employees
Cambridgeshire and Peterborough Combined Authority paid out over £280,000 in exit packages to staff over the last two years, a report says.
The Combined Authority’s draft statement of accounts lists two exit packages in 2019/20.
Under “compulsory redundancies,” it says one package of between £200,000 and £250,000 was paid, and under “other departures with exit packages,” an exit package of between £0 and £20,000 was paid.
A further two exit packages, one for £80,000 to £100,000 and another for between £0 to £20,000 are listed in 2018/19.
It is not clear who all the payments were made to, and the Combined Authority has said it will not identify individuals for reasons of confidentiality.
The mayor and leader of the Combined Authority, James Palmer, said the suggestion that a payment of £200,000 to £250,000 was made to one individual does not “ring true” to his understanding of the situation.
“It is not one person, it’s a number of people and it is related to the absorption of the LEP (Local Enterprise Partnership) into the Combined Authority which meant the restructuring of that new body,” he said when asked about the figure over £200,0000, adding there was “duplication of staff” when the LEP was taken over.
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A report for the Combined Authority’s audit and governance committee on Friday (November 27), also heard that a financial settlement was paid to the interim chief finance officer dismissed from the Cambridgeshire and Peterborough Combined Authority in 2018.
Karl Fenlon was only in the role for around five months and was dismissed after he made comments casting doubt over the Combined Authority’s ability to fund key projects, which the mayor described as “misleading”.
At the time it was unknown as to whether Mr Fenlon received any financial settlement.
But an external audit report by Ernst and Young, considered by the Combined Authority’s audit and governance committee on Friday (November 27), said a financial settlement was reached with Mr Fenlon.
The amount Mr Fenlon received has not been disclosed.
The committee heard that although Mr Fenlon left the Combined Authority in the fiscal year 2018/19, his financial settlement was included in the accounts for 2019/20.
Councillor Tony Mason, a Liberal Democrat on South Cambridgeshire District Council, questioned why the notice of the settlement with Mr Fenlon was not included in the accounts.
He said: “If it wasn’t for the letter we have now received [from the external auditors] we would have been unaware that the previous interim CFO had reached a settlement, when previously we were informed that there was no notice and no severance.”
He added: “The accounts should refer where there are agreements in place that arise from a legal consequence. I can appreciate there is a confidentiality nature to these settlements that means that you can’t go into too much detail, but there should at least be a reference – now there is nothing, therefore anybody reading the accounts will be unaware.”
On Mr Fenlon’s settlement, the Ernst and Young report said: “The interim chief finance officer was dismissed in December 2018 (he had been in post since August).
“We considered this matter as part of the 2018/19 audit. We obtained an understanding of the reasons for his departure. We also determined that as an interim appointment he was on a contract that allowed CPCA to terminate the appointment with no notice and no severance.
“CPCA sought legal advice to support the decision. As there was no severance (i.e., an item of account) in 2018/19, we did not report anything on this item to the committee.
“Officers have since informed us that CPCA had reached financial settlement with the interim chief finance officer and this is included as an item of expenditure in the 2019/20 accounts.”
Asked by the Local Democracy Service to comment on who had received the payment of between £200,000 and £250,000 a spokesperson for the Combined Authority said: “Senior officer remuneration disclosures are required by the Accounts and Audit Regulations 2015, which specifically exclude termination benefits.
“The exit package disclosures requirements are instead set by the CIPFA Code of Practice on Local Authority Accounting which specifically require that remuneration bands be merged to prevent identification of individual packages. As such we believe that the information within the officer remuneration note regarding exit packages is correct and to provide further identification would contravene the Code of Practice.”
The Combined Authority would not comment further when asked about the payment.
On the financial settlement reached with Mr Fenlon, the Combined Authority said: “The obligations of the Combined Authority in disclosing exit payments to staff are set out in a code of practice from the Chartered Institute of Public Finance & Accountancy.
“The section on Exit Payments at page 153 of the agenda pack for today’s (November 27) meeting of the Audit & Governance Committee complies with those requirements and sets out the numbers of exit packages in financial bands for each fiscal year. The purpose of this is to avoid individual packages to be identified. For reasons of confidentiality, we are therefore unable to comment further.”
The former chief executive of the Combined Authority was paid £94,500 when he left the authority in 2018.
The Local Democracy Reporting Service was unable to contact Mr Fenlon to ask for comment.