Secret payoff to Welsh council chief executive of more than £200k

Martin Shipton

A council chief executive who has not been at work for 11 months after falling out with the authority’s political leader is to receive severance pay totalling £209,000 following a secret decision made by councillors.

Members of Caerphilly County Borough Council chose to make the payment to chief executive Christina Harrhy rather than go through a tortuous process to get rid of her that could have cost £520,000.

Councillors decided on the “cheaper” option at a meeting behind closed doors on Monday evening, voting by 43 votes to 14 with five abstentions to authorise the £209k payoff to Ms Harrhy.

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Reported

All councillors were told at the meeting that if they spoke to the media about the deal they would be reported to the Public Services Ombudsman for Wales for breaching the local government code of conduct.

Such a finding would be likely to lead to their being suspended for months.

There has been talk within council circles for many months that she fell out with the authority’s Labour leader Sean Morgan over the appointment of a senior officer. It is understood that allegations of bullying followed, but that an investigation carried out by the Local Government Association exonerated Cllr Morgan.

Nation.Cymru has been told that he declared an interest and did not participate in Monday evening’s meeting.

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'Special leave'

During her absence on “special leave” from the council, it is known that Ms Harrhy applied to be the chief fire officer at South Wales Fire and Rescue Service. She got to a short list of two, but failed to be appointed.

Because she was on special leave rather than sick leave, Ms Harrhy was entitled to full pay. In the 2022-23 financial year her salary was £148,773, along with pension contributions of £28,640, making a total of £177,413. In 2023-24 her salary rose to £153,111.

In August, a spokesman for Caerphilly council told us: “We are aware of recent media coverage and posts circulating on social media, but all we can say is that the chief executive is not in work at present and, as we have a duty of care to maintain confidentiality in regard to this matter, it would not be appropriate to comment further.”

Independent investigator

Under an arrangement that applies to local authorities in Wales but not in England, councils that want to discipline their chief executive have to appoint an independent investigator to carry out an exhaustive inquiry. Experience has shown that this is much more expensive than an in-house investigation of the kind that would apply to all other council employees.

Caerphilly council was previously at the centre of a notorious senior officers’ pay scandal that cost taxpayers millions of pounds. Its previous chief executive Anthony O'Sullivan was paid more than £1m from the public purse in pay and pensions from his first suspension in March 2013 until his sacking in October 2019.

Mr O’Sullivan was suspended after the Assistant Auditor General for Wales said he had acted unlawfully when recommending himself for a secret salary increase of £26,000 in 2012, to £158,000 a year. In total 21 senior officers would have received pay rises at a time most staff had their pay frozen.

Mr O’Sullivan and two other senior council officers later faced criminal charges of misconduct in a public office, which were dismissed by a judge at Bristol Crown Court in late 2015 on the grounds that “what at worst the defendants ... were endeavouring to achieve, unattractive though it may have been, was avoiding public scrutiny of new remuneration levels”.

Dismissed

Later Mr O’Sullivan’s status was changed from being suspended to being on special leave. He was eventually dismissed on the basis of an independent report for Caerphilly council which concluded he had been "grossly negligent (if not reckless)" and had "wilfully breached his contract".

However, he lodged a claim against the council at an employment tribunal. The case was settled by negotiation, with Mr O’Sullivan getting a final pay-off of £110,700. The decision to settle was made after the council was advised it would potentially have bills totalling £500,000 if it lost.

The cost to the authority rocketed because of the need to have an independent investigator.

Speaking on an unattributable basis about the payoff for Ms Harrhy, one councillor said: “This is another terrible day for Caerphilly council. We were given two terrible options.

“After the senior officers’ pay fiasco, there was talk that the Welsh Government would change the rules so there was no need to use an independent investigator when disciplining a chief executive, but nothing came of that.”

A secret report disclosed to councillors on Monday evening said respect for Ms Harrhy’s leadership skills was “low” among councillors and senior officers.