A council is facing investigation over a £131,000 redundancy payment it made to its chief executive.

The Accounts Commission, the public service watchdog in Scotland, has received dozens of complaints concerning the payout John Lindsay received from East Lothian Council. The sum, which will bring Mr Lindsay’s earnings to almost £400,000 and possibly make him the highest-paid council official in Britain this year, was condemned as outrageous by the Taxpayers’ Alliance.

Blair Gibbs, the pressure group’s campaign director, said that the payout for Mr Lindsay was the largest he had come across and suggested that “the whole system is spiralling out of control”.

Mr Gibbs said: “Taxpayers wherever they are will be utterly astonished at the level of largesse available for council workers, not just salaries and expenses but also ‘golden hellos’ and bumper pay-offs.”

The Accounts Commission said yesterday that it was considering investigating the payment. “I can confirm that we have had correspondence on this and are considering what steps to take. We will respond to the matter in due course,” said a spokeswoman for the commission.

The £131,000 voluntary redundancy payment comes on top of Mr Lindsay’s £103,536-a-year salary and a retirement payment of £155,000. By the time he stands down in July he will have taken home £320,300 for the year and be able to start drawing on his £55,000-a-year pension.

Any investigation by the Accounts Commission will likely to focus on the council’s decision to award Mr Lindsay a separate redundancy payment on top of the £155,000 retirement sum, and whether this represented value for money for the taxpayer.

According to council policy, the £155,000 lump sum was calculated by roughly tripling Mr Lindsay’s annual pension. The £131,000 redundancy payment was awarded even though Mr Lindsay is 59 and would have been entitled to retire within months anyway.

The controversy over his payout comes a week after a survey highlighted the growing number of council officials on City-like salaries.

The survey, which used information obtained under the Freedom of Information Act, showed that five council officials in Britain earned more than £200,000 last year, and that eleven earned more than the £186,429 paid to Tony Blair, the Prime Minister.

A spokeswoman for East Lothian Council insisted that Mr Lindsay’s pay-off was in accordance with council policy.

She said that his departure, which would reduce the number of senior posts at the council from five to four, would lead to a saving of £400,000.

Norman Murray, the council leader, denied suggestions that Mr Lindsay had proposed his own redundancy. He said that the retirement was a “direct consequence of a decision taken by us at a political level. John Lindsay did not advise us to make him redundant nor did he propose the elimination of his own department.”

He added: “We remained convinced that this was the right decision, designed to save £400,000 over the next four years and to make for more efficient government.”

Quids in

—Up to 700,000 female town hall staff eligible for compensation

—£3 billion: the total compensation that town halls face in equal back-pay claims

—£30,000: the amount a female worker could win in equal pay compensation

—£8,000 to £15,000: the current wage of female worker most likely to get extra pay

—4.2 per cent: the likely council tax rise in 2007-08 500,000: the potential female NHS staff eligible for compensation

—11,000 NHS claims already at employment tribunals

Source: Times Database

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