SIC wrongly paid out £8,000 to help new employee move to isles

Shetland Islands Council paid out £8,000 to help a newly hired employee move to the islands from south even though they were not entitled to a penny.

In another case an administrative blunder meant a worker may have pocketed more than the maximum payout of £8,000 plus VAT.

Those mistakes with public money were just two in a series of errors council officials made recently when paying for relocation packages to new employees taking up jobs with the local authority.

Moves are now afoot to tighten procedures and cut back on the amount of money spent on recruiting employees from the mainland.

Relocation expenses are paid for a family’s travel and removal costs, up to two years’ storage costs and the legal costs of ending a mortgage and selling a house south and buying one in Shetland, including the cost of a survey, stamp duty and connecting to services.

In addition, 11 council houses and several other rural teachers’ houses are reserved for incoming workers to live in for up to three years. If they are not suitable a new employee with a family can have their bills paid for privately renting a house or staying in a hotel for the first year up to the level of £193.48 a week.

Employees can also claim the full cost of buying new domestic goods if they are replacing ones from the old home which “are not suitable” for the new home.

The relocation rates and the £8,000 ceiling have not risen since 2004.

The council’s internal auditors recently studied the 14 people who were paid relocation expenses bet­ween December 2009 and May this year. The most concerning case un­covered was the aforementioned ineligible employee who got the absolute maximum £8,000 even though the job advert clearly stated there was no relocation package for the post. The manager apparently took the money from another budget.

The council’s top managers were recently asked to decide what action to take as a result of the rules being ignored.

Five of the 14 people were allowed to get away with not signing a form agreeing to repay a percentage of the expenses if they quit the job within two years. In the event, three did leave within that period and one of them even had another £350 claim paid after quitting.

Only one of the three had signed the repayment form and returned some of the money. The other two were initially not even asked. One did eventually pay back the £1,200 owed after the council fired off a letter of demand. The third person paid back nothing of the £4,800 owed but the council deemed it not worthwhile to pursue the matter through the courts.

In other cases payments were made for items which were not eligible for reimbursement under the policy. The auditors have suggested that cuts could be made in the length of time that rent is paid, cutting the maximum payment and stopping paying for domestic goods that employees were apparently claiming for.


Add Your Comment
  • David Spence

    • October 6th, 2011 18:13

    Can someone explain to me, how the council can press court action against someone for £74.56 of 3 month late council tax yet decides it is “not worthwhile” to do the same when someone owes £4800!!!

  • Ben Laurenson

    • October 7th, 2011 8:07

    While you’re explaining that can you tell me why the manager who “took the money from another budget” to pay an ineligible employee’s relocation expenses is not subject of a fraud investigation? Or are they also one of the people who have since left with 8 grand in their back pocket?


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