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Serious Fraud Office made 'irregular' £400,000 payoff to chief executive Serious Fraud Office made 'irregular' £400,000 payoff to chief executive
(about 3 hours later)
The Serious Fraud Office made "irregular" pension and severance payments of £422,000 to its former chief executive that cannot be clawed back, the National Audit Office has found.The Serious Fraud Office made "irregular" pension and severance payments of £422,000 to its former chief executive that cannot be clawed back, the National Audit Office has found.
As a result, the public spending watchdog has qualified the SFO's accounts for 2011-12 – which means they have not been approved as showing that money was spent in the way parliament intended. As a result, the public spending watchdog has qualified the SFO's accounts for 2011-12, which means they have not been approved as showing that money was spent in the way parliament intended.
Margaret Hodge MP, chair of the public accounts committee, has condemned what she called the "sweetheart deal" between the SFO and its former executive.Margaret Hodge MP, chair of the public accounts committee, has condemned what she called the "sweetheart deal" between the SFO and its former executive.
Phillippa Williamson took voluntary redundancy in April and was paid £407,000 to cover any pension costs arising from early departure. The SFO – an independent government department charged with investigating and prosecuting serious or complex fraud and corruption – failed to gain approval from the Cabinet Office for this payment.Phillippa Williamson took voluntary redundancy in April and was paid £407,000 to cover any pension costs arising from early departure. The SFO – an independent government department charged with investigating and prosecuting serious or complex fraud and corruption – failed to gain approval from the Cabinet Office for this payment.
There is also no evidence that it sought Treasury approval, as required, for a special severance payment of £15,000. Both payments have been deemed "irregular" by the NAO. Further, it found no evidence due process was followed in instigating the voluntary redundancy – for example, in relation to whether alternative positions within the civil service were sought. There is also no evidence that it sought Treasury approval, as required, for a special severance payment of £15,000. Both payments have been deemed irregular by the NAO. Further, it found no evidence due process was followed in instigating the voluntary redundancy – for example, in relation to whether alternative positions within the civil service were sought.
Williamson, who along with her boss, director Richard Alderman, bungled an inquiry into property developers the Tchenguiz brothers, followed him out of the door soon after he was forced to issue a humiliating apology and step down at the end of his contract.Williamson, who along with her boss, director Richard Alderman, bungled an inquiry into property developers the Tchenguiz brothers, followed him out of the door soon after he was forced to issue a humiliating apology and step down at the end of his contract.
Amyas Morse, the head of the NAO, said: "By failing to seek approval from the Cabinet Office and the Treasury, the Serious Fraud Office entered into an agreement which forced it to make irregular payments. While positive steps have been taken by the incoming director, I have qualified the organisation's accounts."Amyas Morse, the head of the NAO, said: "By failing to seek approval from the Cabinet Office and the Treasury, the Serious Fraud Office entered into an agreement which forced it to make irregular payments. While positive steps have been taken by the incoming director, I have qualified the organisation's accounts."
The SFO's new director, David Green, sought legal advice on taking office that confirmed Williamson's agreement was legally binding. He has commissioned an independent review into the matter and has taken steps to ensure that all future exit packages are appropriately reviewed, the NAO said.The SFO's new director, David Green, sought legal advice on taking office that confirmed Williamson's agreement was legally binding. He has commissioned an independent review into the matter and has taken steps to ensure that all future exit packages are appropriately reviewed, the NAO said.
The SFO said Green notified the NAO of his decision not to seek retrospective approval from the Treasury of what he considered "unjustified expenditure".The SFO said Green notified the NAO of his decision not to seek retrospective approval from the Treasury of what he considered "unjustified expenditure".
Hodge said she was "astonished" to discover the SFO's former chief executive was given a special severance payment, at a time of sharp cuts in public spending which are affecting essential services. She said the CEO and the SFO sealed the terms of this "sweetheart deal" outside official Treasury procedures, and deplored the fact that the SFO was unable to claw back the money. Hodge said she was astonished to discover the SFO's former chief executive was given a special severance payment, at a time of sharp cuts in public spending which are affecting essential services. She said the CEO and the SFO sealed the terms of this "sweetheart deal" outside official Treasury procedures, and deplored the fact that the SFO was unable to claw back the money.
"The SFO showed a total disregard for taxpayers' money when they wrote out a five-figure cheque to the CEO and failed to provide valid justification for the payment," said Hodge."The SFO showed a total disregard for taxpayers' money when they wrote out a five-figure cheque to the CEO and failed to provide valid justification for the payment," said Hodge.
"The SFO also ignored Cabinet Office rules when signing off £407,000 worth of pension entitlements. My committee will want to see an immediate stop to unacceptable payments of this kind.""The SFO also ignored Cabinet Office rules when signing off £407,000 worth of pension entitlements. My committee will want to see an immediate stop to unacceptable payments of this kind."
Emily Thornberry, the shadow attorney general, said: "This is jaw-dropping. We cannot have irregular payments being made inside what is supposed to be the country's leading fraud investigator.Emily Thornberry, the shadow attorney general, said: "This is jaw-dropping. We cannot have irregular payments being made inside what is supposed to be the country's leading fraud investigator.
"This comes hot on the heels of a string of high profile blunders, such as the botched probe into the Tchenguiz brothers. Since this government took office, the SFO has been haemorrhaging staff, so we need to establish that this is an isolated incident. The SFO faces budget cuts of more than 25% this parliament and can ill-afford squandering half a million on appalling decisions like this.""This comes hot on the heels of a string of high profile blunders, such as the botched probe into the Tchenguiz brothers. Since this government took office, the SFO has been haemorrhaging staff, so we need to establish that this is an isolated incident. The SFO faces budget cuts of more than 25% this parliament and can ill-afford squandering half a million on appalling decisions like this."
The SFO said: "The present director David Green took up post on 21 April 2012. Upon learning of the exit terms he asked Treasury solicitors to conduct a full independent inquiry. He took legal advice as to the enforceability of the agreement and notified the National Audit Office of his decision not to seek retrospective approval from HM Treasury of what he considered unjustified expenditure."The SFO said: "The present director David Green took up post on 21 April 2012. Upon learning of the exit terms he asked Treasury solicitors to conduct a full independent inquiry. He took legal advice as to the enforceability of the agreement and notified the National Audit Office of his decision not to seek retrospective approval from HM Treasury of what he considered unjustified expenditure."