Thanet council’s use of non-disclosure agreements – authorised cash settlements as long as details on the issue are not made public – is under scrutiny by external auditors.
Grant Thornton LLP, which audits the authority, say a delay to issuing a value for money conclusion in the accounts comes after a complaint was made about the NDA use.
That complaint was lodged by Broadstairs resident and former councillor Ian Driver who had previously obtained figures for the amount spent on the gagging orders through a Freedom of Information request.
The details released from that request show that £446,503 was spent on orders between April 2015 and the end of August 2019. Payments were made to more than 30 staff during that timeframe.
Mr Driver says a further request shows £268,000 was spent in 2019-20 on securing NDAs.
In a letter to the auditor he said: “I wish to make an objection about the management of non-disclosure agreements (NDAs) agreed with departing council staff during the 2019-20 financial year.
“According to a Freedom of Information request I submitted to the council the organisation spent £268,000 in 2019-20 on securing NDAs. This request was made in early March 2020. I suspect that the actual figure may be higher.
“I have reason to believe that one of those NDAs was agreed between the Council and former employee (who) is reported to have made very serious allegations of bullying.”
The former employee NDA is related to a letter sent to Thanet councillors in September by a GMB Union officer, outlining claims from a council employee who raised a grievance against members of the senior management team in June/July 2019..
The letter said the employee and the union member were told to sign Non Disclosure Agreements to read the independent investigation report into the complaint.
In response to the letter Thanet council made an official complaint to the GMB union asking for the removal of a regional representative from any council involvement and said legal advice was being sought over “breach” of a non disclosure agreement.
Council chief executive Madeline Homer has delegated powers to authorise settlements up to £100,000.
Grant Thornton said further enquiries into the objection are needed before the firm issues its 2019/20 value for money conclusion.
The report by Grant Thornton says: “During 2019/20 a number of matters were brought to the auditor’s attention regarding grievances and the arrangements in place to respond to those grievances.
“As part of our value for money conclusion we are reviewing the arrangements the council has followed to respond to the grievances.”
A council spokesperson said: “An objection has been received and is being handled in line with standard procedure. That won’t prevent the auditor from concluding the audit on our financial statement of accounts. It is not unusual for an external auditor to have not resolved all objections by the time the accounts are agreed. Approval of the accounts was deferred to a future meeting due to a separate technical issue regarding asset valuations.”
The council’s statement of accounts 2019/20 document, recently published, also mentions: “It should be noted that Internal Audit have raised some concerns with the Council’s three statutory officers (the Chief Executive, the Deputy Chief Executive and the Corporate Director of Governance), the external auditors Grant Thornton, the Chairman and Vice Chairman of the Governance and Audit committee regarding some matters that Internal Audit have been involved during the year, which were still to be resolved.”
The governance and audit concern likely relates to a letter sent by the East Kent Internal Audit Partnership head Christine Parker.
The accounts also reveal that there were 11 compulsory redundancies during the 2019/20 tax year. Seven of those staff earned no more than £20,000, three earned between £20,000-£40,000 and one earned between £40,000-£60,000.
There were also seven ‘other departures’ of staff earning under £40,000. The total paid out in ‘packages’ was £362,000, compared to £138,000 the year before.
The accounts statement says: “The council terminated the contracts of 18 employees in 2019-20. This included 5 planned redundancies at Ramsgate Port at a cost of £114k to provide the on-going savings required to balance the 2019-20 budget.
“It also included 5 redundancies within East (Kent) Services following a restructure of the ICT service at a cost of £127k. As this is a shared service with Dover District Council and Canterbury City Council, TDC’s share of the redundancies related to this restructure was only £42k. Within the total payment of £362k there were no enhancements of retirement benefits.”