SHETLAND Islands Council convener Sandy Cluness admitted that mistakes had been made surrounding the appointment of former chief executive David Clark last year, when he gave evidence to a public inquiry before the Accounts Commission yesterday (Monday).
However Mr Cluness defended the oil rich authority for the excellent services it delivers, its investment in the local economy to sustain the population and its consensus style approach with 22 independent councillors.
The Accounts Commission called the two day hearing after serious concerns were raised about the way the SIC has been governed recently.
A report in May by the Controller of Audit Caroline Gardner highlighted difficult working relationships, elected members failing to act in the council’s interest and public concern about the £285,000 tax free pay off to Mr Clark after just nine months in post.
Accounts Commission chairman John Baillie said there was concern about Audit Scotland qualifying the SIC’s accounts for the past four years because of their failure to group them with those of the £200 million oil-funded Shetland Charitable Trust.
However the hearing was mainly about the SIC’s strategic leadership, roles and responsibilities, governance, accountability and financial management, he said.
Ms Gardner told the hearing Shetland did not appear to have improved since critical best value reports in 2005 and 2007, and councillors appeared to have difficulty balancing their role as corporate leaders and local representatives.
Mr Cluness accepted there were failings during the recruitment of Mr Clark, a business consultant with no previous experience working for a public body.
During his brief tenure in office he underwent an internal inquiry about an alleged threat to a Lerwick councillor and a drinking session in his office with a former business associate he appointed as a consultant, and he was the subject of a 20 point complaint signed by six of the council’s 22 members.
It emerged during the hearing that the SIC only had a proper system for appointing staff for everyone except the chief executive. As a result no external consultant was asked to help recruit Mr Clark, advice from personnel managers was ignored and the whole council carried out the interview.
No appraisal system was put in place to monitor Mr Clark’s performance until the end of the summer when he was already embroiled in several controversies, including his deletion of the post of assistant chief executive Willie Shannon without proper authority.
Mr Cluness accepted this was “not good enough” and took on board criticism that lessons had not been learned from 1999 when a previous chief executive Nick Reiter was paid off by the SIC.
“I can assure this commission and the people of Shetland that in that respect at least lessons will be learnt and any recommendation made by your commission will be implemented to the letter.”
Mr Cluness added that it became impossible to pursue the six councillors’ complaint against Mr Clark last December because it had been immediately leaked to the local media.
This, he said, led to advice that Mr Clark would have a strong legal case if the council tried to take disciplinary action and dismiss him.
Instead the council called in local government umbrella group COSLA to help them reach a negotiated settlement that saw Mr Clark leave office with £250,000 lump sum and three months pay with the council covering his legal costs and his tax bill.
Mr Cluness said he would seek legal advice to try and make the negotiated settlement with Mr Clark public so that it would demonstrate the kind of pressure the council had been put under.
“The advice I received was that part of the difficulty was the publication of the complaints. Somehow or other it became public in detail and also the details of the individuals who had signed it. Then it became exceedingly difficult,” Mr Cluness said.
“Nothing would please me better than to have this whole information made public.”
Questioned about their ability to provide strong leadership the nine councillors representing the council’s leadership said they accepted that they would have to start working as a team.
Services committee chairman Gussie Angus said he believed that this month’s decision to consult on closing five rural primary and two secondary schools was a “giant leap for this council” even though it might be “a small step for most authorities”.
Betty Fullerton, vice chairman of the services committee, added that the biggest hurdle facing members was “getting the people of Shetland to accept that we don’t have the money to spend that we had in the past”.
She added: “I do have the utmost confidence that we can do this but we are going to need a bit more time and we are certainly going to have to act as leaders probably more than we have done in the past.”
The inquiry continues today (Tuesday) when it will hear evidence from Mr Clark himself.
Last night the council was waiting to hear of Orkney Islands Council’s chief executive Alistair Buchan had accepted their offer to serve as interim chief executive until 2012 to help them modernise.
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