Thursday, 1 September 2016

Public's interest led to details of Davani 'exit payment' being revealed

My attention has been drawn to Minutes of Brent's Audit Committee which give further infromation on Cara Davani's 'pay-off' from the Council. The Minutes do not explain why no disciplinary action was taken against her in 2014 after the Employment Tribunal and why (and by whom) a decision was made in May 2015 to seek legal advice on ending her employment with Brent Council.

Extract from minutes of Brent Council’s Audit Committee meeting held on 30 June 2016 (item 7 – Draft Statement of Accounts, 2015/16)
The Chair drew attention to note 30 of the draft accounts, which appeared on page 56 of the printed agenda, and asked officers to clarify the process by which the exit payment to the former HR Director had been agreed, as this was known to be a matter of interest to some members of the public.

Conrad Hall explained firstly that the Council acknowledged that the entire sequence of events reflected poorly on the Council.  He added that the Council was not required to publish the figure, but had chosen to do so. Technically under regulations the note was only required to disclose the remuneration of the Chief Executive, officers reporting directly to the Chief Executive and statutory officers.  The Council’s former HR Director met none of these criteria in 2015/16, the year of account. Nonetheless, officers had decided to publish the figure because of the known interest in it, which was felt outweighed the statutory obligations.

In terms of process, Conrad Hall explained that in May 2015 advice had been sought from a leading QC specialising in employment law.  The QC had been recommended by the Council’s Monitoring Officer from a framework contract operated by the London boroughs legal alliance.  His advice, in conference, had in summary been that the Council lacked good grounds to conduct a fair dismissal of the Council’s former HR Director for a variety of reasons, and had it attempted to do so it was likely to have been found to have acted unfairly by an Employment Tribunal.  Conrad Hall further advised that had such a course of action been attempted then the Council had been notified that a substantial claim would have been submitted by the former HR Director and that under those circumstances the decision had been taken to seek to settle matters by way of a compromise agreement.  Conrad Hall added that the terms of the final settlement, essentially one year’s salary plus notice, (which were broadly similar to payments to some other senior managers) had been notified to the external auditor.   Whilst the auditor was not required legally to ‘sign-off’ such payments, he nonetheless had the power to intervene in cases where he felt the Council was acting inappropriately, for example if he considered the payment excessive.  Phil Johnson confirmed this and that he had chosen not to exercise his powers to intervene.  Conrad Hall concluded that the terms of the settlement had therefore been negotiated bearing the commercial considerations in mind.  In response to a question from a member of the committee, Conrad Hall confirmed that the Council’s former HR Director had not been subject to disciplinary or capability proceedings, which would have been a decision of her then line manager.

Members asked why the situation had reached the point it had and further enquired of the process followed.  The Chief Executive explained the circumstances at the time and pointed out the improvements that had since been made to the HR procedures concerned, as referenced in the Annual Governance Statement reported under item 9 on the agenda.  The Chair suggested that consideration be given to what information could be made available on this matter that would provide a time line and demonstrate to members how lessons learnt had led to new improved procedures being introduced.’


Nan. said...

Chair of Audit Committee's questions to Conrad Hall -

I note the council was advised on the Cara Davani matter by a QC from the recommended list. Was QC advice sought on the merits of defending or settling in the Rosemarie Clarke Case?

Following the Rosemarie Clarke case, why was a decision taken to appeal the tribunal decision when there was no point of law on which an appeal could be reasonably founded?

Following the Rosemarie Clarke judgement why were disciplinary proceedings not instituted against Cara Davani, Director of HR?

Given the conflicts at senior level extant in the matter, who was engaged to brief Members and provide advice on damage limitation and an agreed way forward?

To what extent did the council's failure to institute disciplinary proceedings cause the council to have to make the pay off to prevent Cara Davani from suing the council?

Oh, the Chair of Audit didn't ask those questions...........

Member of public's question to David Ewart, Chair of Audit Committee -

What actually is your function?

Philip Grant said...

It is interesting to read that Brent Council notified its external auditor at KPMG about the pay-off to Cara Davani in 2015, before it was made, so that he could object if he thought the Council was acting inappropriately. The auditor did not intervene to stop the payment then, but I doubt whether he was given the full story!

Now, that same auditor has to deal with objections to the £157k pay-off being included in Brent's 2015/16 accounts from at least three local electors in the borough. This time, he has been given 'the full story'. It will be interesting to see whether he takes a different view now, or whether he simply "rubber stamps" the original decision to make the pay-off.


Philip Grant said...

While I agree, Nan, that the Council still has a lot of questions to answer about Cara Davani, the pay-off to her, and the Rosemarie Clarke case, I think you are being a bit hard on David Ewart.

He is the independent Chair of Brent's Audit Committee, and it was he, not any of the Brent councillors on the Committee, who had picked up the point about the £157,610 "leaving payment" to the (un-named) former HR Director at Note 30, on page 56, of Brent's draft accounts, and raised questions about it at the meeting on 30 June.

There might be at least some further information made public at the Audit Committee's next meeting on 22 September, if Mr Ewart's suggestion at the end of the minute is followed up. ['The Chair suggested that consideration be given to what information could be made available on this matter that would provide a time line and demonstrate to members how lessons learnt had led to new improved procedures being introduced.’]

However, the best chance of getting more information on this very "dodgy" episode in Brent's history will be if the auditor (Philip Johnstone of KPMG) does agree to make a Public Interest Report on this matter, as requested in objections by local electors to Brent's 2015/16 accounts.


Nan. said...

Dear Philip,

I wrote to David Ewart TWICE during the whole disgraceful episode, drawing his attention to what had been happening, so he was more than well briefed.

Suffice it to say, I did not receive even the courtesy of a reply.