Financial watchdog begins investigation into David Clark deal

Financial watchdog Audit Scotland is beginning its investigation into the departure of Shetland Islands Council chief executive David Clark, who left the authority last week after councillors agreed to a payoff of £250,000.

The organisation had originally been planning to look at relationships between councillors and officials amid concerns over the way the council was being governed, but that was put on hold while a settlement was reached with Mr Clark.

On Wednesday Audit Scotland announced that it hoped to have a report ready for the Accounts Commission by the end of April for consideration at its meeting in mid-May. In a statement, Audit Scotland said that while it could not pre-empt any action the Accounts Commission may take, it has powers to order more audit work, hold a public hearing and, in certain circumstances, censure, suspend or disqualify councillors.

The settlement with Mr Clark has provoked an outcry in Shetland, with public demonstrations calling for councillors to stand down and face by-elections. Council convener Sandy Cluness and other senior councillors have stood by the decision and insisted it was the best way to deal with a very difficult situation.

Questions remain to be answered, however, in particular why the council did not wait for the outcome of a second police investigation into allegations Mr Clark threatened violence in a phone call to councillor Jonathan Wills in September last year in light of new evidence. A report has now been submitted to the procurator fiscal.

Similarly, what happened to the complaint detailing more than 20 alleged misdemeanours by Mr Clark made by six councillors in December last year?

The Audit Scotland statement said: “Like all councils, Shetland Islands Council has a duty to provide best value to local people, which requires it to follow the principles of good governance. Audit Scotland recognises Shetlanders’ high levels of concern about recent events at their council and has been following developments closely.

“Previous audit reports have expressed concern with the situation at the council, and in December the Accounts Commission asked the Controller of Audit to investigate further, noting that the accounts were qualified again and that there may be wider problems with governance.

“The scope of this extra audit work was discussed and agreed with the Commission in January, but while the chief executive’s position was unresolved this made on-site audit work difficult to pursue.

“We will now begin work, looking particularly at the events surrounding the departure of the chief executive and the decision-making processes followed by the council. We expect to have a report ready for the Accounts Commission by the end of April, for consideration at their meeting in mid-May. At that meeting we will also brief the Commission on the wider governance issues at the council. The Commission will announce its response to the Controller of Audit’s report after this meeting.

“We cannot pre-empt what steps the Commission may take but it has powers to require further audit work, to hold a public hearing, and, in certain circumstances, to censure, suspend or disqualify elected members.”