Council condemned for 'eye-watering' payouts

The former chief executive of a small district council received a total pay and pension package of almost £570,000 last year - four times the Prime Minister's £142,500 salary - it has emerged.

Philip Dolan was handed £569,000 when he opted for redundancy from South Somerset District Council in March, as part of a restructuring which saw the authority share its chief executive with neighbouring East Devon.

Two other senior executives at the council - the director of health and head of economic vitality - received more than £300,000 each.

The payouts equate to £7 for each of the council's 162,000 residents, though local media reported that part of the cost was paid by East Devon.

According to the Daily Telegraph, the payments made Mr Dolan the best-rewarded public servant in either local or national government last year.

After taking voluntary redundancy at the age of 54, Mr Dolan received his normal salary of £157,000, along with a redundancy payment of £167,000 and £6,000 to cover "lost benefits". The council also agreed to pay an extra £239,000 into his pension scheme to cover payments that would have been made had he continued working until 65.

The leader of South Somerset District Council, Tim Carroll, was among a group of Liberal Democrat local authority leaders who wrote an open letter to Local Government Secretary Eric Pickles, warning that sharply reduced grants from central government would lead to cuts in frontline services.

Commenting on the South Somerset payouts, Local Government minister Bob Neill said: "These are eye-watering sums of money and raise serious questions about the financial credibility of the council. Bumper pay-offs like this are completely unacceptable and show a breathtaking lack of respect for public money."

But in a statement to local media, the council said that its new senior management structure had resulted in "annual actual savings of around £355,000".

Mr Dolan denied he had received special treatment, telling the Telegraph: "The calculation that you would undertake for a street cleaner of the same age as me would be identical. It wouldn't have been the same figure but the calculation is the same. There are no added extras, there are no fat cat golden handshakes."

A spokeswoman for South Somerset Council today said that none of the executives involved received "any extra bonus, golden handshake or similar, simply the normal redundancy entitlement calculated using the normal method that would apply to any member of staff, irrespective of grade".

The three voluntary redundancies were made as part of a restructuring to reduce senior management and make "significant" annual savings from the salary bill at the council, which went from having a chief executive and four directors to a shared chief executive and two directors.

Mr Dolan's £167,000 redundancy payment was his entitlement based on two decades of service in local government, using the method that would apply to any member of staff leaving under voluntary redundancy at that period in time, said the spokeswoman.

His annual salary was £133,878, but with notice he received £157,000 over his last year in employment with the council. South Somerset was required to pay £239,000 to the Local Government Pension Fund in relation to Mr Dolan, but this sum was not paid directly to him.

The spokeswoman said: "Mr Dolan made an application for voluntary redundancy in order to make way for the appointment of a joint CEO, the start of a cost-saving partnership between South Somerset and East Devon district councils.

"It resulted in the immediate reduction from two CEOs to one joint CEO across both authorities and an immediate £96,000 per annum saving for South Somerset District Council on its CEO salary bill.

"This is something that every council is being encouraged to do by the coalition Government and will result in long-term savings for South Somerset council tax payers.

"Mr Dolan's redundancy request and associated payment was approved by the council's District Executive Committee. The cost of it is being shared on a 40%/60% basis with East Devon District Council as it made way for the appointment of a cost-saving shared CEO."

The other two executives who took voluntary redundancy were entitled to a loss of office payment of £112,000 and £121,000 respectively based on their annual salaries of £93,279, according to calculations which applied in the same way to all members of staff leaving under the scheme, said the spokeswoman.