City council finance chief in £500,000 pay-off

Sep 5 2008 David Bartlett, Liverpool Daily Post

LIVERPOOL council’s director of finance is set to depart the local authority with a £500,000 “golden handshake”, the Daily Post can reveal.

Phil Halsall, who earns £180,000 a year, will be seconded to one of the city’s joint venture partners, Enterprise plc, in October before taking early retirement in April next year.

Mr Halsall, 50, will receive an extra five years’ enhancement on his pension package, worth around £420,000, and a lump sum of £80,000.

It comes after the council was labelled the worst in the country in February because of the poor state of its finances, though Mr Halsall has always defended his own record.

His position came under doubt earlier this year when chief executive Colin Hilton decided to restructure the top tier of council management, cutting Mr Halsall’s post.

Mr Halsall, 50, becomes the second person this year to agree a high-profile severance package with the council after former Culture Company chief executive Jason Harborow secured a £230,000 pay-off in January.

Mr Halsall will be the last member of former chief executive Sir David Henshaw’s inner circle – known to critics as “the cabal” but who always rejected those claims – to leave the council.

Sir David departed in 2006 with a £340,000 pay-off after his public fall out with former council leader Mike Storey.

David McElhinney, former director of central services, Sir David’s right-hand man and “enforcer”, also left in 2006.

He became chief executive of the now under-fire Liverpool Direct Limited, a joint venture to run IT with BT.

Last night Labour opposition leader Joe Anderson said Mr Halsall was being made a “scapegoat” for the failings of the Liberal Democrat administration and was also paying the price for having raised concerns about the fall out between Cllr Storey and Sir David in 2005.

Today fri council leader Warren Bradley will chair a meeting of the council’s appointments and disciplinary panel which will approve Mr Halsall’s pay-off.

Last night he said, as chairman of the committee, it would be inappropriate for him to comment.

The council has always insisted the deletion of Mr Halsall’s post is designed to improve performance and give Mr Hilton greater responsibility over financial affairs.

Mr Hilton will take on some of the financial responsibilities, while Mr Halsall’s second in command, Robert Corbett, will also be given extra roles.

Next Monday, Mr Halsall will go on holiday and upon return to work in October will start a secondment with the council’s joint venture partner, Enterprise plc.

In April next year, he will officially take early retirement and his employment with the council will end.

Under the terms of the pay-off, around £420,000 will be added to Mr Halsall’s pension pot and he will also be given an £80,000 lump sum.

The deal, which includes a gagging clause, precludes Mr Halsall or the council talking about its terms.

Current local government rules allow councils to “uplift” an employee’s pension if they are aged between 50 and 55.

It is understood the council would have been liable to uplift Mr Halsall’s pension pot if he had been made redundant instead under the current management changes.

Last night, Cllr Anderson said: “At a time when we have been criticised about the financial capability of the council in relation to how we perform, we should not be cutting our capacity.”

He said giving the chief executive more financial power was like “asking a painter- decorator to do your electrics. You usually live to regret it”.

“As far as I am concerned he is being scapegoated for having raised questions about the Henshaw/Storey fall-out,” he said.

“I think he is being punished for that.

“The Lib-Dems bear full responsibility for the financial decisions that were made.

“The decisions that were taken around finances were taken politically.

“We can ill-afford to be paying out this money at this time.”

A council spokesman said: “We do not discuss matters involving individual members of staff.”