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Audit watchdog probes council tax golden handshakes’

PUBLISHED: 16:01 26 August 2009 | UPDATED: 14:46 05 October 2010

LARGE pay-offs to council chiefs quitting their post who start work soon afterwards for another local authority are being investigated by the Audit Commission. It follows a wave of golden handshakes including Chief Executive Martin Smith at Tower Hamlets

By Mike Brooke

LARGE pay-offs to council chiefs quitting their post who start work soon afterwards for another local authority are being investigated by the Audit Commission spending watchdog.

It follows a wave of recent golden handshakes including Chief Executive Martin Smith whose controversial departure at Tower Hamlets in East London caused a stormy debate at the Town Hall with council leader Lutfur Rahman under fire.

His reported pay-off between £300,000 and £400,000 was paid out of council taxes in Britain’s most deprived borough, critics pointed out.

Cllr Rahman said in a statement at the time that “a fresh approach” was needed and it had been agreed it was an appropriate time for him to move on.

But Government ministers are now saying public money must be protected.

GENEROUS

Communities Secretary John Denham has asked the Audit Commission to look at what chief executives are getting and whether tougher procedures are needed to protect the taxpayer.

He said: “It’s not acceptable for town hall chiefs and council leaders to agree expensive deals to part company just because they don’t get on or because they would prefer to work with someone else.

“Councils should not spend large sums of taxpayers’ money just to move them on to the next local authority.”

The taxpayer in many cases was being forced to foot the bill because of the whim of a council administration, according to the Society of Local Authority Chief Executives which had to negotiate Mr Smith’s pay-off deal at Tower Hamlets.

The Audit Commission believes evidence from recent years suggested the trend for local authorities to headhunt’ other town hall chief executives was fuelling higher wages and extra costs.

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