Harrogate council accounts to be signed off after months of delays

The annual audit of Harrogate Borough Council’s accounts for 2020/21 is set to finally be signed off after months of delays.

Accountancy firm Mazars was due to receive draft financial statements from the council by a deadline of last July, but this did not happen until three months later on October 25.

The delays were blamed on the impacts of the pandemic, local government reorganisation and the launch of the council’s new leisure company.

Mazars senior manager Diane Harold presented an audit completion report to councillors last night when she said the majority of councils across the country had missed a further deadline for publishing their accounts in full.

Speaking at a meeting of Harrogate Borough Council’s audit and governance committee, she said: 

“The statutory deadline was the end of November – and the majority of local authorities unfortunately did not achieve that so Harrogate was not alone.

“I would like to highlight the significant cooperation from management that I have had, and the pressures that they have faced.

“That is not to take away from the fact that this is now March, but to recognise there has been a lot of effort to get to this stage.”

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Ms Harold added the accounts should now be signed off by Mazars “this week or next at the latest”.

Risks highlighted

The audit completion report from the firm details a number of areas which have been highlighted as risks, including “errors” and “inconsistencies” in the council’s valuation of its property and equipment.

The report also said there is a risk that the council’s 2021/22 accounts will not be approved before the authority is replaced by the new North Yorkshire Council in April 2023.

The report added: 

“We have had the full cooperation of management, however, there have been continued delays in responding to queries, in particular in October and November 2021, due to pressures on officers arising from multiple factors, including the impact of the pandemic, local government reorganisation and also the new leisure company.

“Based on arrangements in place for the 2020/21 audit, there is a risk that the 2021/22 financial statements will not be approved by 31 March 2023 i.e. before local government reorganisation.”

Harrogate councillors approve new rules on staff exit packages

Harrogate Borough Council has approved new rules on staff severance packages after a review into the payments.

The payments, which can include allowances, hardship payments and paid leave for departing staff, will now have to be approved by the council leader and chief executive, and reported on an annual basis.

Any payments over £100,000 will also require approval from full council.

Previously, the payments were signed off by a monitoring officer and only those to senior staff were reported annually.

The new rules were approved at a meeting on Monday after independent auditors Mazars warned this year that the previous process risked a lack of balance between “inappropriate expenditure” and “allowing ineffective employment relationships to continue”.

£354,000 paid out in 2019/20

The council’s annual statement of accounts showed £354,000 was paid to 19 former employees in 2019/20 for wider payout packages, also including redundancy costs and compensation for loss of office.

This was an increase from the previous financial year, when £278,000 was agreed for 15 staff.

The statement of accounts also showed one member of staff received a £62,000 exit package in 2019/2020, although it is not known what job title they had or how much they were earning before they left their role.

The only member of staff who was named in the document was former director of community Paul Campbell, who left last year and was paid £55,065 in compensation for loss of office.

Mr Campbell had an annual salary of £89,727 and oversaw a range of council services, including emergency planning, housing, parks, waste and health and safety.

He has not been replaced since leaving 18 months ago. The council has said his responsibilities are being shared by other directors.

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At Monday’s audit and governance committee meeting, Jennifer Norton, head of legal and governance at the council, explained the new rules to councillors. She said:

“In accordance with current regulations, you do receive in the annual report the remuneration of senior employees including details of any severance payments.

“What I am proposing in line with government guidance is that regardless of seniority, all severance payments are reported on an annual basis.

“In terms of member involvement in the approval process, then the government guidance says that should sit with the leader of the council, which is what is proposed here.”

The new rules were unanimously voted through by members of the committee.

Harrogate council to review staff payouts after spending more than £600,000

Harrogate Borough Council will review how it agrees staff payout packages which have cost taxpayers around £632,000 over the past two years.

That is according to a report from independent auditors Mazars. The company has recommended a rethink on how payments including redundancy cash and compensation for loss of office are agreed for departing members of staff.

It comes after figures published in the council’s annual statement of accounts showed £354,000 was paid out to 19 former employees in 2019/2020 – an increase from the previous financial year when £278,000 was agreed for 15 staff.

Mazars has warned the current process, which sees payments signed off by a monitoring officer, risks a lack of balance between “inappropriate expenditure” and “allowing ineffective employment relationships to continue”.

The report said any staff payout packages should require a final approval from elected councillors before they are made:

“We encourage members to consider updating their risk management arrangements for employee settlement agreements to ensure that, for each case, members also approve payments after satisfying themselves that there is a clear rationale and payments comply with legislation, costs are minimised and available options have been considered.”

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In response, the council said in the report that it would carry out a review even though the current process already ensured there is a “clear rationale” for the payments which are “properly authorised”:

“Although the number of such cases has been small, and flexibility is sometimes needed to deal with them in a timely manner, the council will review its processes in order to ensure member involvement in future decisions.”

The statement of accounts shows one member of staff received a £62,000 exit package in 2019/2020, although it is not known what job title they had or how much they were earning before they left their role.

The only member of staff who was named in the document was former director of community Paul Campbell who left suddenly last year and was paid £55,065 in compensation for loss of office.

Mr Campbell had an annual salary of £89,727 and oversaw a range of council services including emergency planning, housing, parks, waste and health and safety.

He has not been replaced since leaving 13 months ago and his responsibilities are being shared by other directors, the council previously said.

Nearby in York, the city council has been forced on the defensive after a report from Mazars said a £117,000 redundancy settlement to ex-chief executive Mary Weastell was paid unnecessarily.

The report suggests the authority wanted to avoid defending a tribunal claim which Ms Weastell dropped after the payout was agreed.

Mazars said the council paid out £24,884 in redundancy and a £65,779 ex-gratia payment, effectively a gift, neither of which were required.

The city council has defended the payments saying they were contractual obligations.

In numbers: Harrogate Borough Council

Exit packages agreed for departing staff between April 2019 and March 2020 – 19 (at a cost of £354,000)

Exit packages agreed for departing staff between April 2018 and March 2019 – 15 (at a cost of £278,000)

Number of exit packages totalling less than £20,000 – 20

Average cost of exit package for single employee in 2019/20 – £18,632

Average cost of exit package for single employee in 2018/19 – £18,533

These figures include compulsory and voluntary redundancy costs, associated pension costs and payments in lieu of notice.

In a statement, a council spokesperson said:

“The council’s constitution currently provides for delegated approval by the monitoring officer for settlement agreements.

“Although the number of cases are relatively small, we will review the process in line with the audit recommendation.”