Thanet council Cabinet members are being asked to give approval for a huge £697,000- £733,000 to pay for legal costs due to on-going disciplinary and grievance proceedings at the authority.
A legal firm was hired in March 2020 to provide governance support and costs were estimated to run to £40,000, By July 2020 this estimate was revised to £50,000 but it has now been revealed that the Director of Finance is reporting costs incurred to the end of May 2021 relating to the on-going disciplinary and grievance proceedings already total £247,000. Of this sum, £141,515 relates specifically to 2020-21.
A report to Cabinet members says future potential costs are estimated to range between £450,000 to £486,000, resulting in total legal costs forecast at between £697,000 and £733,000.
Of costs incurred to date £114,000 relates to overall process management, £111,000 to internal processes under the council’s control and £22,000 for external employment tribunals.
Future anticipated/potential costs are split between £78,000 to conclude Thanet council internal processes and £408,000 for external employment tribunals.
However, the costs could exceed even the current forecast, with the report to Cabinet warning: “It should be noted that the forecasts represent the council’s costs only and therefore there is a risk that the council’s financial exposure could exceed this envelope.
“There is also a risk that costs may exceed these current estimates if the proceedings’ durations extend beyond current expectations or if appeals are lodged.”
Grievances and disciplinary processes
There have been numerous investigations into staff grievances and disciplinary processes being dealt with by the Investigations & Disciplinary Sub-Committee (IDSC) at the council.
It is understood the authority currently has ongoing investigations into complaints and counter complaints involving all four of the top management team – CEO Madeline Homer, Gavin Waite, Tim Willis and monitoring officer Tim Howes, who has been suspended from his post since last December.
There is at least one staff grievance that has been dragging on since 2019 and is still to reach a conclusion.
Last September the need for a governance and culture review “from the top down” was highlighted in a report by the head of the East Kent Internal Audit Partnership, saying “action is needed at Thanet District Council to address the cultural and governance failures that stem from the very top of the organisation.”
The call came from partnership head Christine Parker in a letter to the then chair and vice chair of the authority’s governance committee.
Ms Parker highlighted concerns over senior officer relationships and ‘blurred reporting lines’ as well as raising the issue of grievance procedures that have not been brought to a conclusion.
She said matters leaked into the public domain included an independent investigator’s findings that “there was evidence of bullying and harassment of staff by some of the most senior members of staff within the organisation.”
Two grievance complaints were filed by TDC staff against top officers during 2019.
Last year the process of dealing with employment grievances prompted the GMB union to call on Thanet council to implement a new, independent system for dealing with bullying and harassment complaints against senior officers, saying the current methods are ‘compromised beyond further use.’
Earlier this year, the prolonged grievance procedures were blamed for holding up an “urgent” review of the culture at the authority.
But the review cannot take place until the conclusion of investigations into staff grievances and disciplinary processes being dealt with by the Investigations & Disciplinary Sub-Committee (IDSC) as it is said this would cause an overlap and mean certain issues could not be discussed openly.
The legal costs revelation comes on the heels of a complaint lodged about Thanet council’s use of non disclosure agreements and this is being investigated by external auditors Grant Thornton LLP.
That complaint was made 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.
Cabinet approval needed
The issue of the large legal costs is being brought to Cabinet members on June 8 because Cabinet approval must be sought for all budgets which are in excess of £50,000.
A report to Cabinet members says: “The legal firm that is overseeing and managing these processes was selected because of their particular expertise in dealing with constitutional and local government employment issues and because the matter could not be managed in-house because of perceived conflicts of interest.”
The report also highlights the difficulty of finding finances due to depleted reserves.
It says: “The council’s finances are in a delicate position, even before the pandemic our reserves were relatively low and we had a history of not delivering savings or income targets.
“The impact of the Covid pandemic is expected to put further strain on the Council’s finances, the full extent of this will not be known until the year-end position is finalised and this will be reported to Cabinet on 29 July 2021. As such, at this time it is not possible to specify what the exact financing source of the £247,000 for costs to date will be, but inevitably will need to be financed from our limited earmarked reserves.
“This will be a challenging task to identify available funding, particularly in light of the requirement to allocate £3m of earmarked reserves within 2020-21 to address the financial impact of Covid.
“To comply with relevant accounting standards it will be necessary to create a provision in the 2020-21 accounts to fully cover anticipated future expenditure. Therefore, anticipated total costs of £733,000 will need to be recognised and again financed from our reserves in 2020-21.”
The report adds that £247,000 “must be approved” retrospectively because the funds have already been paid out.
County Councillor Karen Constantine, who spent a number of years as a trade union official, said: “I am extremely saddened to hear about what’s happing at TDC. Workplace bullying is abhorrent and illegal. As an ex TDC councillor who has been on the receiving end of direct bullying and as someone to whom staff (and ex staff) often talk to about their similar experiences, it’s astounding that this decision to spend huge amounts of local taxpayers money has been taken. More striking still, is the decision is undemocratic.
“Thanet residents and TDC employees deserves much better than this. The solution to these protracted employment cases is to get parties and their representatives, including in this case the GMB, around a table to reach a negotiated settlement.
“Proceeding to tribunal should be a last resort, especially in the public sector where funds are always tight. The last thing Thanet needs now is a huge lawyers’ bill! These costs are simply eyewatering and do not include the hidden costs of lowered productivity, nor the negative impact on the health and well-being of TDC staff, and the cost of managing the impact of bullying.”