'˜Golden goodbye' row: Sunderland Council leader refuses to reveal pay-off sum for £242,000-a-year chief executive

Dr Smith – who commanded an annual salary, including pension contributions, of £242,768, resigned in August, shortly after a damning Ofsted report revealed catastrophic failings within the council’s children’s services department.

It has been revealed that the financial settlement for Dr Smith was determined by the human resources committee.

This is despite local government minister Eric Pickles issuing guidance to local authorities that packages should, in the interests of transparency, be agreed by the full council.

At this week’s full council meeting, Tory member Coun Michael Dixon asked why this guidance had been ignored and the decision made by a closed committee.

Councillor Dixon asked: “Bearing in mind the Secretary of State’s advice, why was the decision about the financial settlement for the chief executive not made by the full council?”

Coun Watson said: “I am not prepared to comment on the personal circumstances of any individual.

“I would, however, point out to Councillor Dixon, that the council’s pay policy statement provides that payments to chief officers, on termination of their employment, are determined by the human resources committee.

“That committee may therefore decide such matters, where appropriate.”

Coun Dixon then asked “How much more than £100,000 did his pay-off amount to.”

Coun Watson replied: “As already stated, I will not comment on individual people’s severance.”

In February 2013, Eric Pickles identified tackling excess pay for senior officers as one of 50 ways councils can make savings to help tackle budget deficits, and reduce public spending

In an effort to tackle six-figure pay-offs, he announced that packages should be presented to full council to be democratically approved, in order to offer maximum value for money for the taxpayer.

Mr Pickles said at the time that if councils do not act on this, he is ready to take steps to require them to.

“For too long, local government has made severance pay arrangements away from the eyes of those who get left with the bill – the taxpayer,” he said.

“Town hall chief executives are well paid, so if they are not up to the job, councils need to part ways with them fairly.

“Quietly agreeing to thousands in under-the-counter parachute pay-offs for departing bureaucrats is not the way to achieve this.”

Breakdown of salary and job role of city chief executive

Dr Dave Smith was first appointed by Sunderland City Council as chief executive in 2005.

From Salford, Greater Manchester, Dr Smith took over the top job in December 2008, after the departure of Ged Fitzgerald.

Documents available on the authority’s website list his annual basic salary for the financial year 2014/15 as £209,468. In addition, £33,300 worth of pension contributions were made on his behalf that year.

His gross pay the previous year was £198,726 plus £25,356 in pension contributions. According to figures released in 2015, as chief executive, Dr Smith was responsible for providing services to more than 275,000 residents, with an overall budget of £678.8million.

He was the lead policy advisor to the council’s 75 elected members and undertook the role of the head of paid service to 7,729 employees. He was also the designated returning officer.

When he quit last August, it followed seven years of budget cuts, which meant the council had to slash £170million from its spending.

No reason has been given for his resignation, however, the decision came just weeks after an Ofsted report revealed failings within the authority’s Children’s Services.

Ofsted inspectors said there were “widespread and serious failures” following a three-week visit that found child protection, adoption, and children in care services were inadequate.

The report stated there was a “corporate failure” and said “children are potentially at risk from harm.”