Actions of council officials ‘fell short’ of public sector values – watchdog

Actions by a group of senior staff at Glasgow City Council in approving exit packages for five top officials “fell short” of public sector values, a watchdog has said.

In 2021, a plan was drawn up for the restructuring of senior parts of the council, which included the early retirement of then chief executive Annemarie O’Donnell – which took place in May 2024 and was described as an “efficiency”, despite a replacement being appointed.

Along with Ms O’Donnell, a further four senior bosses left the council as part of the plan, costing more than £1 million in payouts and pension boosts.

When the costs were reported to a council committee, an internal review was commissioned by the new chief executive and law firm Brodies LLP was instructed to investigate.

Ms O’Donnell agreed earlier this year to pay back the more than £300,000 in pension funds her early retirement had cost.

In a report released on Thursday by the Accounts Commission, the former chief executive’s departure has again been criticised, including for not involving elected councillors in the approval process.

Council rules mean elected members should be consulted on decisions considered to be “politically controversial”.

The report said: “What can be considered politically controversial is a judgment.

“However, it is reasonable to consider the early retirement of the chief executive on efficiency grounds, and the operational and financial implications of this, could meet this description, and it is not clear what consideration was given to this issue.

“The independent review concluded that officers should have referred the restructure report to the relevant city convener for consultation as a matter of potential political controversy.

“Councillors do not, however, appear to have been involved in the decision-making or approval processes for the exit packages for any of the five senior officers, including the chief executive.

“There is no evidence of the proposals and terms being discussed with councillors and the restructure report was not shared with councillors or presented at committee for approval.”

The report also suggested it appears the restructuring plan was approved “by some individuals who then benefitted from its proposals”.

Accounts Commission deputy chairman Andrew Burns said: “The actions taken by a group of senior staff at Glasgow City Council fell short of the values and principles every public sector worker and councillor are expected to follow.

“There was a failure to address and document how potential conflicts of interest were considered.

“A failure to demonstrate how the guiding principles of working in the public sector – in particular selflessness, integrity and objectivity – had been applied.

“It is alarming to see reports which need to consider the lawfulness of actions within councils, and such circumstances do little to reassure taxpayers about how public money is being used.

“All councils need to undertake restructuring, particularly with financial pressures, growing demand and an ageing workforce.

“Given the issues highlighted in this report, the Accounts Commission will write to all council chief executives and leaders to highlight the importance of good governance, value for money and transparency in decision making.”

A spokesman for the council welcomed the report, which they said “reflects the findings of the independent investigation by the council”.

They added: “The commission’s findings will support the action the council is already taking to improve oversight and transparency and to rebuild trust; both within the organisation and with the public.”

City treasurer Ricky Bell said: “The Accounts Commission’s findings illustrate exactly why the council leader and I first raised concerns about exit packages for senior officials last year – and why it was so necessary for the council to take quite extraordinary steps to establish what had gone on.

“While neither the independent, external review or this report from the commission make for comfortable reading, they do give us a base to build trust and confidence from – and, I think, they also serve as an important warning to other public bodies.

“Glasgow had already moved quickly to change processes and allow elected members proper oversight when senior officials leave the council, which is noted in this report.

“Members must now make sure the council reflects on the commission’s findings and uses them to drive forward a change in culture; which I know the current chief executive and her leadership team take very seriously.”

Scottish Conservative local government spokesman Craig Hoy said the report “could hardly be more damning” for the council.

“Glasgow’s SNP-run council rode roughshod over the rules and, as a result, departing officials received eye-watering payouts with little to no oversight.

“It’s sadly typical of the way in which the nationalists conduct themselves in office, with a worrying lack of accountability or concern for taxpayers’ money, while putting the interests of themselves and their cronies first.”

Council leader Susan Aitken and Mr Bell – both SNP members – raised serious concerns about the exit packages.

Mr Hoy added: “Glaswegians will be rightly furious that, while the SNP administration is slashing essential services and imposing inflation-busting council tax hikes, it found huge sums to hand out to fat-cat bureaucrats.”