£151,308 Thurrock Thames Gateway Development Corp accounts irregularity

Amyas Morse, Comptroller and Auditor General, has qualified the final accounts of the Thurrock Thames Gateway Development Corporation because of irregularity in respect of payments in lieu of notice and other costs. Today’s report concludes that the Corporation’s senior management did not act with proper regard for regularity and propriety in respect of these payments.

The Corporation was established in 2004 as a non-departmental public body sponsored by the Department for Communities and Local Government. On 3 April 2012, Parliament put into force an order for the Corporation to be wound up on 31 October 2012. However, senior management did not issue to the six staff remaining in post formal notification of the termination of their employment until 10 October, less than two weeks before their redundancy date of 22 October. The six members of staff were made payments in lieu of notice to a total of £151,308.

Given the certainty of closure by 31 October, senior management breached their fiduciary duties by not issuing notice earlier. This would have restricted the need for, or amounts of, payment in lieu of notice. The two senior staff were conflicted in this matter because they benefited from the payments that derived from the late issuing of notice. Each of the two authorized the other’s payment.

The C&AG has qualified the account because the Corporation did not follow procedures requiring it to seek the approval of the Department for such payments. As soon as the Department became aware that the payments were going to be made, it instructed the Corporation not to make them but the Corporation had already done so. The Department has so far been unable to recover the money but, with its full support, Thurrock Council (to whom the assets and rights of the Corporation have passed) is now pursuing recovery action in respect of the payments to the two senior staff.

In the winding up period, the Corporation incurred other costs that, in the view of the C&AG, did not also constitute a proper use of public money. Like many public bodies, the Corporation provided staff with access to additional training and support to further their careers after redundancy, but incurred costs of £12,786 which the C&AG deemed contentious. Proposals should have been referred to the Department for onward submission to the Treasury for approval. Payments for pottery, jewellery and patchwork quilting training, as well as the cost of software retained by the Chief Executive on closure of the Corporation, were included in this expenditure. The audit also found that the Corporation paid £2,385 for relocation costs for an ex-member of staff which were not in accordance with its relocation policy.