Northumberland County Council boss Daljit Lally to get six-figure payout despite expenses dispute

The controversial chief of a North East council will walk away with a six-figure payout following a protracted and public dispute with leading councillors, despite lingering questions about unlawful expenditure.

Daljit Lally, CEO of Northumberland County Council, will be paid £209,000 to leave her role at the end of July despite the misgivings of several councillors.

The cost includes a £75,000 payment to settle an employment tribunal claim for "injury to feelings" and £40,000 on account of "injury or disability".

It brings to an end a two-year saga for the council that has seen a former leader toppled, a damning review of governance at the council and the issue of a section 114 notice relating to the unlawful expenditure of tens of thousands of pounds.

As part of the settlement, the council also agreed to waive its right to bring a claim for recovery of the £179,032.09 international allowance not properly authorised and identified as unlawful by the section 114 report.

The council will seek to recover just over £79,000 of the sum from contributions paid to pensions and HMRC, with the remaining £100,000 written off.

Furthermore, both the council and Mrs Lally will cease all action against each other, including employment tribunals and standards cases.

It had originally looked as though the decision would be taken behind closed doors - however, the council's monitoring officer, Suki Binjal, advised members that the "overwhelming public interest" in the situation meant that there was justification for hearing the debate in public.

It was brought before members at an extraordinary meeting of full council on Wednesday 27 July that saw proceedings pause while a member of the public was ejected for heckling councillors - the second meeting in a row this had happened.

Solicitor Mark Greenburgh provided legal advice and told members there was "no possibility" of the chief executive resigning, adding: "She believes she has done nothing wrong."

Mr Greenburgh explained that while there were other options available to the council, including commencing a disciplinary investigation or pursuing dismissal on the grounds of ill health capability, these options would likely be more expensive than the payout offered to Mrs Lally, while simultaneously taking months to complete.

Mr Greenburgh said the payout was "the best option" and one members should accept.

But a number of councillors were unhappy with the proposals. Cllr John Beynon said: "Morally, it is wrong. I've heard it is the best way to move forward, and it is the cheapest option."

However, other members argued that agreeing to the payout was the only way to draw a line under the situation and move forward.

Cllr Ian Hutchinson said: "It's between your head and heart. Financially, the way the figures stack up, you have to vote with your head."

Meanwhile Cllr Colin Horncastle challenged those members against the proposals to come up with an alternative solution.

Deputy leader Cllr Richard Wearmouth said the way forward "irked" and "irritated" him, but added: "You may be thinking that any chief executive presented with this information would have resigned. It's not going to happen.

"Dealing with the issues around Mrs Lally takes a huge amount of time and has already costs tens, if not hundreds of thousands of pounds. We have been told that will increase significantly if we don't deal with this."

The payout was approved by 38 votes to seven with four abstentions.

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