UK Politics

Former Serious Fraud Office boss criticised over staff severance payments

MPs have criticised the former director of the Serious Fraud Office for allegedly sanctioning £1m in severance payments to three senior staff without the necessary approval.

Chair of the Public Accounts Committee, Labour's Margaret Hodge, described the failure to get approval as "shocking".

And Conservative Stewart Jackson said the agency had been "slovenly".

But Richard Alderman defended the pay-offs and insisted authorisation had been sought from the Cabinet Office.

Former chief executive Phillippa Williamson left in April 2012 with a severance package of £464,905, while former chief capability officer Chris Bailes received £473,167 and technology head Ian McCall £49,885.

The National Audit Office said the payments to Ms Williamson were "irregular" and "made without proper authorisation".

As a result, it qualified the SFO's 2011-12 accounts, which means it did not approve the money being spent in the way intended by Parliament.

'Exotic arrangements'

Giving evidence to the committee, which was looking into the qualification of the accounts, Mr Alderman insisted the pay-offs were necessary because he had been informed the three staff would "get their marching orders" when his successor David Green took over in 2012.

He told MPs the severance pay-offs reflected that their careers were being terminated a decade early, because they were unable to find new posts because of cuts to senior civil service staff.

He said his office had sought approval from the Cabinet Office but said there was no documentary evidence to show consent had been given.

Mr Green, who was appearing alongside his predecessor, contradicted Mr Alderman's comments.

He told MPs the only "firm decisions" he had made was to get rid of "exotic" arrangements under which Ms Williamson worked from home two days a work, with travel and hotel expenses paid to her to spend three days in her London office.

Mr Green commissioned an inquiry into the severance payments, led by senior civil servant Tim Hurdle, which found it "difficult to conclude" that Mr Alderman took "sufficient steps to ensure that his chosen course of action represented good value for money".

Mr Green told the committee the Treasury had blocked Mr Bailes' ex-gratia payment as "irregular", even though he has received legal advice that it is contractually enforceable.

Mr Alderman said Ms Williamson's package was agreed "in accordance with civil service rules and it was approved by internal audit and the National Audit Office".

'Pretty informal'

He said the Hurdle report had not attempted to trace the phone or email records which he said would show that a colleague at the SFO had sought Cabinet Office approval.

"My view is that my colleague was absolutely entitled to take the view that [the payout] had received Cabinet Office consent, because it couldn't have taken place without that consent," he said.

The committee's chair, Labour MP Margaret Hodge, said: "The feeling I get is that you ran a pretty informal system there. You took the decision to put all your top team through redundancy, you don't appear to have consulted anybody on that, you negotiated the terms yourself.

"It is somewhat surprising that, as a lawyer, you didn't have some regard to due process...in an organisation that is funded by the public purse and therefore has to be accountable for the money it dispenses.

"I just don't get why you didn't follow due process."

'No contrition'

And Conservative MP Stewart Jackson said: "This is dilatory, this is sloppy, this is slovenly and there is not one iota of contrition from you or apology for the culture that existed."

Mr Alderman said he did not apologise for the decisions he had taken, but added: "If there are failures in respect of the Whitehall processes on the finance, then yes, the committee has my apology".

The former director also defended his decision to go on twelve overseas trips - totally 52 days - in his final year in office. He said allegations that SFO executives had accepted expensive gifts from consultants had been shown to be untrue after an investigation.

He told the panel of MPs the only gift he had personally received was "a ham sandwich, consisting of two slices of white bread, a piece of ham and no lettuce".

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