The controversial six-figure payout deal paid to a North East council boss earlier this year included an agreement to drop ongoing complaints against three unnamed councillors.
Former Northumberland County Council CEO Daljit Lally was paid £209,000 to leave her role at the end of July, following a long-running dispute with leading councillors that had caused deadlock at the authority.
As part of the settlement, Mrs Lally agreed to cease all action against the council. Now, a report written by leading lawyer Samantha Broadfoot KC has revealed that the agreement included three complaints that have already been investigated, but are yet to be revealed to the public.
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The deal, which also included an agreement that the council would drop all complaints and action against Mrs Lally, was agreed at a full council meeting in July by 38 votes to seven with four abstentions.
At July's meeting of the council's standards committee, it was unanimously agreed that the complaints would progress to a local hearing following advice from Ms Broadfoot.
On Thursday, the standards committee was told that two of the complaints were made jointly by Mrs Lally and a senior council officer, while the third was made by the former CEO and a serving councillor.
A local hearing would see a report presented by the investigating officer to the standards committee. However, the deal agreed between the council and Mrs Lally has brought a "fundamental change in circumstances" that led to the committee reversing its decision.
Speaking at Thursday's meeting, Ms Broadfoot said: "There has been a fundamental change in circumstances since we last met. The question is how to deal with that.
"A very significant part of those complaints involved allegations made by and related to Mrs Lally. She has withdrawn all her complaints and wishes to move on.
"There is something left behind, but the majority has now gone, so in practical terms the various parts of the complaints need to be untangled, it needs to be separated.
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"The senior officer who made the complaints has been contacted on several occasions, but their position is still ambiguous. In relation to the member, the position in relation to that matter is they want to proceed.
"My advice is that, procedurally, the cleanest and fairest option is for the committee to rescind the July resolution and send the three complaints back a step."
Ms Broadfoot also noted that the the Max Caller report into governance at the council identified some "inappropriate use" of the conduct complaint process by officers against members and pointed to a "culture of mistrust" at the council.
Her recommendation was that the process of all three complaints is put back one step. The council's monitoring officer, Suki Binjal, would then decide whether to refer the matter to a local hearing, or seek local resolution.
A local resolution is a way of handling complaints by resolving, explaining or clearing up a matter.
The monitoring officer could also chose to exercise discretion under Section 7.2 of the Council's Local Arrangements, which would bring the complaints to an end.
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However, at the previous meeting in July when the method was discussed, Ms Broadfoot said: "My view is if you took this course and somebody challenged it, the council would lose at judicial review. Unless you know more about the complaints, my legal advice is that you cannot exercise discretion because you don't know enough about it."
Following Ms Broadfoot's latest advice, Coun Scott Lee asked whether Mrs Lally's deal included withdrawing all the evidence she had submitted with regards to the complaint, to which chairman Joe Jackson confirmed she had.
Coun Lynne Grimshaw was concerned that the public would perceive the move negatively.
She said: "The public have lost faith in this council and the Caller report was damning. How will the public receive this?
"They might think we're trying to hide something. We have a duty to be held accountable. I don't know why we have to go back when we've got to this stage."
Mr Jackson replied: "What we're looking to try and do is accept that there is still an issue here to be dealt with. The complaints need to be dealt with and we need to do it in the most cost-effective way.
"We have to see whether a full hearing would be fundamentally flawed and whether there would be substantial grounds for legal challenge."
Coun David Towns added: "The majority of county councillors in this room - not including myself and at least one other - voted in full council for the deal with the former chief executive which very clearly set out that she woudl withdraw her allegations.
"I didn't vote for that but it is what a majority of county councillors did vote for. I find it slightly incredible that we have people saying it is worth spending more money on this when councillors voted for the deal largely on the basis it would cut the costs of any furthe investigations."
The committee agreed to proceed with Ms Broadfoot's recommendations by five votes to two, with two abstentions. Conservative and Liberal Democrat councillors backed the move, while one independent and one Labour councillor voted against and two other Labour members abstained.
Earlier this year Conservative councillors John Riddle and Richard Wearmouth were cleared of any misconduct by external investigators after code of conduct complaints were submitted by Mrs Lally and the council's former HR director Kelly Angus.
In both cases, the investigator considered that neither councillor was in breach of the code. Both reports were reviewed the monitoring officer and "deemed sufficient."
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