22nd May 2018
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Council blocks freedom of information request into David Clark payoff

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Shetland Islands Council is refusing to divulge details of its settlement with former chief executive David Clark, which saw him leave office earlier this year after only nine months in the post.

In response to a freedom of information request from The Shetland Times, the SIC said it was unable to provide a detailed breakdown of what was paid out in legal costs and fees in a deal which saw Mr Clark pocket a tax-free sum of £250,000. It is believed that, once tax and various fees are factored in, the total cost to the public purse will be around £500,000.

The council’s response stated that fees and other costs paid to its lawyers Anderson Strathern in respect of the settlement amounted to £33,844.31 as of 1st March, when the request was submitted. It also stated that discussions with HM Revenue and Customs over the tax sum due in respect of the settlement “have not yet been held”.

Requests for details of the legal advice the council received, the sums of money involved and the terms of the settlement with Mr Clark were rejected on the grounds that to disclose such information would be “substantially prejudicial to the effective conduct of public affairs” under section 30 of the Freedom of Information (Scotland) Act 2002, would constitute “an actionable breach of confidence” under section 36 and because, under section 38, it “relates to personal information of an individual”.

However The Shetland Times is to challenge the decision and will now ask the council to carry out a review. If this is unsuccessful, the newspaper will refer the matter to Scottish Information Commissioner Kevin Dunion.

Editor Paul Riddell said: “The council pro­fesses to be open. It is anything but. There is a strong public interest argument here in favour of at least partial disclosure. After all, we are talking about council taxpayers’ money. I think Mr Dunion will be very interested to hear from us.”

When the council announced that it had reached an agreement with Mr Clark, Northern Isles MP Alistair Carmichael urged the SIC to level with the people of Shetland. He said on Thursday: “It remains to be seen whether the council are legally correct. The information commissioner will decide that. Politically, however, it is difficult to see how the council can hope to put this episode behind them without greater openness.”

The circumstances surrounding Mr Clark’s departure are the subject of an ongoing investigation by Audit Scotland. A recent review by its counterpart in England, the Audit Commission, found that 37 council bosses south of the border had left their jobs by “mutual agreement”, often because of personal differences with councillors, and were given payoffs of, on average, £256,104. The Audit Commission’s report recommended that severance deals should be fully disclosed and subjected to tighter scrutiny.

It stated: “Severance deals can be in the interests of the council and the taxpayer. But our research shows that not all such deals are justified, that competent chief executives have sometimes lost their jobs needlessly, and that less effective individuals have been paid off rather than dismissed.

“The Commission wants all deals to be more transparent. They should be reviewed by scrutiny or remuneration committees, with details published shortly after they are agreed. And councils should consider whether to include so-called ‘pre-nuptial’ clauses in contracts, specifying the grounds and payment for severance.”

Local government minister John Denham welcomed the report’s recommendations, saying it showed that too many chief executives were being dismissed because of relationship breakdowns and that payoffs were “all too often seen as a quick-fix solution”. “Taxpayers’ money should not be used to resolve personal differences,” he said.

Remarkably, The Shetland Times‘ request for clarity on the status of a complaint, lodged by six councillors with SIC convener Sandy Cluness in December and detailing 20  alleged misdemeanours by Mr Clark, was also rejected by the council.

“In terms of section 18 of the FOISA I am unable to confirm whether or not any such complaint in the terms you suggest is held by the council,” the response stated. “In general terms, I have given consideration to the public interest, and have determined that as the council has a stated policy of not commenting on matters concerning employee relations, and by upholding the standards of an employer’s duty of care to its employees, the public interest in withholding such information outweighs the interest of the public.”

In a statement on 24th February, Mr Cluness said the council was confident the agreement reached – which sparked outrage among sections of the Shetland population – was “a fair one for both parties” taking into account “the impact of all of this on Mr Clark’s career prospects”. Some of those involved in submitting their concerns to the convener, including Lerwick South councillor Jonathan Wills, have said they will not be withdrawing their complaints.

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