Northumberland County Council's £1m of 'unlawful' exit payouts won't be referred to police

Councillors have been told that there is no evidence of criminal activity over a series of big-money payouts to top county hall officers, despite an investigation finding that they were issued without the proper authorisation.

An initial six payments made between May 2017 and May 2022, totalling £1.06m, have been deemed unlawful by a Northumberland County Council finance chief, on the basis that they were not signed off by councillors through the correct legal processes.

It has now emerged that a seventh exit payment has also been deemed unlawful too by Jan Willis, the authority’s section 151 officer, who told members of an audit committee on Wednesday that it had “also not been properly approved”. That takes the total figure to £1.13m.

However, Ms Willis confirmed that she had uncovered “no evidence of fraud or any other form of potential criminality” that would require the matter to be handed over to Northumbria Police – nor will the council seek to claim any of the funds back.

She said: “Nothing has come to light in the course of establishing this matter that makes me believe that there is any suggestion of fraud having been carried out.”

Wednesday’s audit committee meeting heard that there was a key difference between the payments being unlawful and being illegal – meaning that they would have been legal “had they followed the necessary governance procedures”.

Exit payments to chief council officers must be approved by the authority’s staff and appointments committee, or by full council if the severance package exceeds £100,000. But a provision detailing these rules in Northumberland County Council’s pay policy was removed “for reasons that are unclear” between 2019 and 2022, a report to councillors revealed.

Tory councillor and former cabinet member Nick Oliver claimed he had been refused information “over and over again” about pay-offs during his time in the authority’s leadership team and that some payments were an “absolute mystery”.

Suggesting that the issue be referred to the police, he said: “Surely one of the messages we should be sending out is that we take it seriously and if you abuse money in this way then you will be held to account?”

However, Ms Willis replied: “We have found no evidence of fraud or any other form of potential criminality. I don’t have any basis on which to refer this to the police.

“It is a matter of unlawfulness, not of illegality. These are payments that would have been lawful if the proper procedures had been followed.

“In those circumstances, there is no basis for me to make a formal referral to the police., but if anything further comes to light then I will keep it under review.”

On the issue of whether any of the seven latest unlawful payments could be clawed back, council leader Glen Sanderson said: “The advice we have had from our experts is that it would be very difficult and very expensive to try and get that money back – even though there is a strong temptation for us to want to try.”