SHETLAND Islands Council’s negotiating position with its former chief executive David Clark was undermined by confidential information being leaked to his lawyers, a public inquiry in Shetland heard on Tuesday.
The Accounts Commission was hearing evidence on the second day of its public hearing into concerns about leadership, governance and financial control at the local authority following the controversial £285,000 settlement with Mr Clark last February.
It emerged that the bulk of this payment was for personal injury to Mr Clark after criticism of him by councillors was made public.
Mr Clark told the hearing that he had been put under a constant barrage of attacks from certain councillors, singling out Lerwick member Jonathan Wills who he described as a “perpetual revolutionary” who was never satisfied.
He said that the council was “rudderless” when he arrived in post on 1 June last year, and that there was a “laissez faire” leadership without any sense of team spirit,
Within two weeks the attacks started, he said, when he publicly defended the council’s head of planning from public criticism by councillor Wills, and continued even after the councillor’s campaign to reverse a decision on where to build a £50 million secondary school for Lerwick had succeeded.
Mr Clark said: “Councillor Wills has the Trotsky view of perpetual revolution where whatever is decided upon will be overthrown before it can achieve anything.
“It seems no matter what happened, it was used as a basis to attack, not seeking common ground, but looking for holes to see where we can pick, destroy, where we can bring down.”
He said his position became impossible when malicious rumours were spread about his private life.
The hearing heard that £230,500 of the £285,000 mutual separation agreement was to cover personal injury claims.
When asked what the personal injury he had suffered was, he said: “You are in the garden and your partner gets a phone call from a publican telling her that the publican has had a phone call from the head of the licensing board (Cecil Smith) spreading rumours and raising rumours that the pair of us had sex in a public toilet and have been thrown out.
“And then my partner has to go and explain that that rumour is now circulating to her 17 year old daughter, because of what a so-called elected member is doing: acting on rumour and innuendo. That is the kind of personal hurt.”
The council’s chief negotiator in reaching the settlement was Rory Mair, who is chief executive of local government umbrella group COSLA.
Giving evidence, Mr Mair said that Mr Clark’s team were initially asking for £2 million for the damage done to his reputation and personal injury.
The council could perhaps have settled for a lower figure than it did had Mr Clark’s team not been tipped off about the council’s agreed starting point of £200,000.
He said: “His negotiating team already knew about the £200,000 estimated figure and that did set something of a bottom limit. Had the chief executive’s team started without that being in the public domain I might have started a lot lower.”
Mr Mair said that he and the council’s employment law specialist Murray McCall had examined a complaint submitted by six councillors against Mr Clark last December and found that it did not provide a basis to pursue disciplinary action against him.
He also said it would have been unwise to leave Mr Clark in post while a management appraisal system against which his performance could be judged was put in place as the council needed to move on as quickly as possible with strong leadership.
Local MSP Tavish Scott and MP Alistair Carmichael told the hearing that they should not underestimate the level of anger in the community about the performance and payment to the chief executive.
Mr Scott said: “”I don’t think any MP or MSP could ignore the level of disquiet.
“The council is just embarking on a very significant school closure programme. Mums and dads ask me: ‘So, they are going to close our school but they paid off that man with all that money?’
“That’s where people in Shetland are on this one, and I hope the commission recognises the huge level of disquiet.
“We will all be helped as a community if you are able to make sure that the details of all that will be published. I think the whole of Shetland deserve to know the full details. We are paying for it, we deserve to know.”
Mr Carmichael criticised the council for its failure to follow proper procedures, particularly regarding the disciplinary hearing into allegations that Mr Clark threatened councillor Wills over the phone, the manner in which he deleted the post of assistant chief executive and the appointment of a former business associate as a consultant.
He also drew attention to the fact that after being criticised by Audit Scotland for the way it paid off a previous chief executive, Nick Reiter, in 1999, the council still had not implemented recommendations on recruitment and management appraisal.
“It pains me to say that had that been done we might not have had some of the difficulties that we have had,” he said.
However SIC convener Sandy Cluness said he did not accept the situation was “as grave as has been pointed out by our MP and others”.
He said that he shared people’s outrage about the size of the settlement with Mr Clark, had undergone considerable personal criticism and welcomed the opportunity to make the settlement public.
“I have no doubt the Shetland community will continue to be angry about this for a long time.”
The Accounts Commission will publish their findings within the next few weeks, making recommendations for ways in which the council can improve.
A new interim chief executive was appointed on Monday and arrived in Shetland on Tuesday to hear the second day of evidence. Alistair Buchan has been chief executive of neighbouring Orkney Islands Council for the past 13 years and will work in Shetland until 2012.