Robin Hood in Reverse

South Lanarkshire Council may be playing fast and loose with public money - with its spectacularly generous early retirement arrangements for some of the highest paid council officials in the land.

But the council has also exposed - inadvertently perhaps - the true nature of 'final salary' pension schemes which require low paid council workers to subsidise their much better paid colleagues - who almost always turn out to be senior officials, of course.

Take the latest example of South Lanarkshire's generosity towards its education director - who has been in post for only 5 years according to the Hamilton Advertiser.

Nonetheless the contract drawn up by South Lanarkshire Council and the rules of the pension scheme - mean that a 'final salary' of £120,000 a year will still be used to calculate the  official's pension benefits.

Quite why the trade unions are fighting to retain 'final salary' schemes is beyond me - because it is self-evidently fairer to move to a 'career average' arrangement - which requires that what people take out by way of a pension is directly linked to what they actually pay in over the years. 

I'm sure if Robin Hood were still around today - he would definitely be a 'career average' man.       

Gravy Train (20 September 2012)

Here's another interesting article from The Hamilton Advertiser - about the crazy goings on within South Lanarkshire Council.

I had to laugh at the comment from the council's Labour leader - Eddie McAvoy - who told the newspaper he had no regrets about the decision to introduce fixed-term contracts for the council's highest paid officials - before going on to add:

“Contracts such as those gave the council the power to get rid of senior officials if they didn’t measure up. The weakness was that they could leave whether they were a success or failure and still get the same package.”

So that's just fine then - unless of course you're interested in the efficient and good use of public money.

All I can say is that the concept of irony - is clearly lost on some people!

South Lanarkshire Council official in £325,000 severance row

Taxpayers will have to fork out an initial £338,000 so that a senior South Lanarkshire Council official can take early retirement – at age 52.

Larry Forde, the authority’s £120,000-a-year education director, is due to step down on December 31.

Mr Forde was on a controversial five-year fixed term contract that included entitlement for early retirement or voluntary severance payments if a contract was not renewed.

At a private meeting of the council’s executive committee yesterday (Wednesday), officials outlined the costs to the council of Mr Forde’s decision to retire early.

And the Advertiser understands that the authority will be legally obliged to pay a one-off payment of £325,508 into Mr Forde’s pension pot. And there’s also a recurring cost to the council of £13,508 a year.

Exact details of Mr Forde’s lump sum and annual pension arrangements were not revealed but should be outlined in the council’s accounts for the current financial year.

Mr Forde has been South Lanarkshire’s director of education since April, 2007, and has been in charge of a department with a budget of £280m and 6000 staff.

He was formerly head of quality within the education department and before that worked for Glasgow Council’s community education department.

Details of Mr Forde’s severance costs come five weeks after the Advertiser exclusively revealed that the council’s former finance director Linda Hardie retired aged 50 with a severance package of more than £½m.

She received £106,570 compensation for loss of office and £427,000 towards her pension pot.

Ms Hardie had been on paid ‘gardening leave’ from October 18, 2010, until she left the council on April 18 last year after a £38m “arithmetical error” was found in a key budget calculation.

Like Mr Forde, she was one of the directors to benefit from the severance benefits arising from five-year fixed term contracts.

They were introduced in 2002 to encourage “succession planning” but they have led to the council having to pay thousands of pounds into the pension pots of senior officials who have opted to retire early.

Appointments on the basis of fixed-term contracts ended in May last year following a restructure of the council’s management team.

Mr Forde will be the last official to benefit from what Central Scotland Tory MSP Margaret Mitchell termed the “gravy train of severance deals” open to senior officials in South Lanarkshire.

Mrs Mitchell, who has asked Local Government Minister Derek Mackay to probe the contract arrangements for top staff at South Lanarkshire, said this week: “This is a staggering amount of money and I can hope that lessons are learned for the future.

“There has to be transparency and accountability for all these types of arrangements.”

Council leader Eddie McAvoy said after the executive meeting: “We have changed the standing orders of the council to ensure that in future all directors’ retirement packages will go before the executive committee for approval.

“Before the change, approval of packages was delegated to the director of personnel and chief executive.”

Councillor McAvoy said he did not regret the council’s decision to introduce the fixed-term contracts.

“Contracts such as those gave the council the power to get rid of senior officials if they didn’t measure up,” he added. The weakness was that they could leave whether they were a success or failure and still get the same package.”