Report describes ‘fear and intimidation’ at Northumberland county council

Another Council, another investigation – Owl

Northumberland county council operated in a “climate of fear and intimidation” so extreme that senior officers and councillors were constantly making freedom of information (FoI) requests to dig dirt on each other, a report has found.

Helen Pidd 

An independent governance review into the council found it had become “paralysed” due to the “extraordinary” resources devoted to processing almost 5,000 FoI requests made within three years, many from senior officers and councillors.

A second report into the local authority found that its chief executive, Daljit Lally, had been given illegal expense payments of £40,000 each year, on top of her £190,000 a year salary, to run the council’s international consultancy with clients in China and the United Arab Emirates.

The two reports were discussed at an extraordinary meeting of Northumberland county council (NCC) on Wednesday.

The first, by independent consultant Max Caller, who investigated financial mismanagement at Liverpool city council last year, concluded: “NCC needs to undergo a fundamental reset of its philosophy, processes, and relationships … There is little substantive trust in the most senior officer levels of the council and there exists a climate of fear and intimidation.”

He found an organisation so paranoid that all council papers are now watermarked with names because so many had been leaked. Employees “described in harrowing terms how they had been treated extremely poorly by senior officers at NCC”, he said, adding: “Being able to speak truth to power is an essential component of local government and power is held by both members and top officers, but this did not appear to be either encouraged or even tolerated.”

The council is “paralysed due to large volumes of procedural issues which demand an extraordinary resource”, he wrote, saying: “There have been 4792 FOIs in three years and 307 subject access requests (SARs), many from senior officers and members. One SAR for a member of staff took one colleague two and a half months to complete. The review team were informed that staff had been instructed by senior officers to prioritise some staff and member SARs, the result being that SAR requests, for example, [on behalf of] children looked after, had been delayed.” People can make a SAR to access their personal data.

He also found an unusually large number of staff signed non-disclosure agreements after leaving Northumberland. This meant they could not speak to anybody about the circumstances of their employment with and exit from NCC.

In addition, he uncovered unusually high settlements paid to staff leaving the council, with the organisation spending £2.2m on payoffs between February 2013 and February 2019.

Some settlements were suspicious in their timing, he suggested: “One interviewee described how a colleague informed them that they were retiring in a few months, and they would hand over their responsibilities to another colleague. The interviewee was surprised to then find that the colleague had left within a few days of this conversation. This happened to be immediately prior to the government rules on a cap in exit payments [in the public sector] of £95K coming into force.”

A second report, by NCC’s interim chief finance officer, Jan Willis, found that an international healthcare consultancy – Northumbria International Alliance (NIA) – set up by the council in 2017 to provide commercial income had operated illegally by not being incorporated as a business.

“In entering into international contracts directly, NCC acted unlawfully, and it therefore follows that the expenditure incurred in delivering those contracts was also unlawful,” concluded Willis.

She was particularly critical of the decision to give Lally £40,000 on top of her chief executive salary to consult for NIA. “The international allowance was not paid as a result of any decision taken by a properly authorised decision maker,” concluded Willis, instructing the council’s payroll team to cease the payment with immediate effect.

Willis’ report, known as a section 114 report, does not “seek to attribute any individual blame or responsibility for actions or omissions that have led to the unlawful expenditure identified in this report and should not be read as such”.