The public service workers’ union, the GMB, was tonight demanding an urgent independent investigation into why Croydon Council had spent a “profligate” £350,000 of public money on golden handshakes to four top-level employees in the past year.

Stephen McDonald: £46,385 pay-off after  barely six months’ work

The payments have been uncovered in the council’s annual report, and show that £347,753 was paid to the council’s departing planning executive director, Emma Peters, her short-stop replacement Stephen McDonald, to the community services executive director Tom Jeffrey, and to Damian Roberts, who was in charge of “Step Change”.

All four, part of CEO Jon Rouse’s hand-picked top tier of eight executive directors, were on very generous six-figure salaries at Taberner House. None of the first three to leave the council were announced by Croydon as “redundancies”. Indeed, Peters, Jeffrey and Roberts were said to be moving to other positions, so that there would not usually be any expectation or need for any financial settlement to ease the route to the exit.

In the case of McDonald, the departure last February after barely six months in his £140,000 appointment, did raise suspicions that he may have been dismissed. The formal announcement from Croydon was carefully couched in terms of being “a result of mutual recognition that there was a difference in expectations” and a gagging clause agreed.

Now, it emerges that McDonald’s hiring was an incredibly expensive mistake for the people of Croydon, who have ended up footing the bill: £46,385 after he had been barely half a year in the job.

Emma Peters: said to be the “brains” behind the masterplan for Croydon, she left for another job but received a six-figure golden handshake

The other pay-offs saw Peters receive £111,233 in March last year when we were told by Croydon that she was leaving to take up a position with a specialist regeneration agency; Jeffery got £141,847 after serving what appeared to be a three-month notice period before also taking up consultancy work; and Roberts, whose job was to axe the council’s staff by one-third, got £48,288 when he left at the end of last year “to pursue other career options”, namely a similar role at Waverley Council.

In the council’s annual report, published this week, the pay-offs are listed as compensation for loss of office.

With so many GMB members having lost their council jobs, often on reduced redundancy terms, or have been forced to apply for new posts within “restructuring”, the union believes that Croydon has discriminated in favour of the high-paid exec directors. Any council worker forced to apply for a new job in restructuring but was unsuccessful left employment without a penny in compensation.

The GMB points to council’s formal policy on payments to chief officers: “In exceptional circumstances other severance payments may be made subject to agreement of the Chief Executive and the Director of Workforce and Community Resources and as allowed for in the Council’s scheme of delegation. Such payment will take account of the Council’s contractual and legal obligations, value for money, reputation of the Council and goodwill towards the employee”.

The GMB’s Nadine Houghton said, “This profligacy needs to be investigated urgently as it seems this group of employees have been treated differently to everyone else. Croydon Council recently cut redundancy payments for many staff as part of a cost-saving exercise. They are now seeing cuts within the council that amount to a scorched earth policy.

“We have seen cuts to children’s centres, the closure of two children’s homes and numerous redundancies. The money wasted on these golden handshakes could have well been used to fund services for the most vulnerable citizens in Croydon and to preserve our members’ jobs.

“How can the council possibly justify these huge golden handshakes to senior officers? It’s the gravy train for those at the top even in austere times.”

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