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Wednesday, February 28, 2024

Middlesbrough Council extends top officers’ contracts, incurring nearly half a million pounds in costs

A report noted the cost to the CIPFA for the interim arrangement would be approximately £243,000.

The contracts of Middlesbrough Council’s top officers are set to be extended at a cost of almost half a million pounds.

Councillors have agreed to keep Clive Heaphy as chief executive and Debbie Middleton as director of finance until March 2025. The interim positions will cost the council around £476,000 as it looks to recruit permanent posts.

Mr Heaphy was hired via the Chartered Institute of Public Finance and Accountancy (CIPFA) – the professional body for people in public finance. A report noted the cost to the CIPFA for the interim arrangement would be approximately £243,000.

CIPFA pays Mr Heaphy his salary and it is understood additional costs include pension and national insurance contributions. A spokesperson for CIPFA would not confirm Mr Heaphy’s salary but said they also provide an “advisory offering” as part of the relationship with the council.

It’s a similar arrangement for Ms Middleton’s post which will cost the council approximately £233,000 for 12 months. Again, the council said the sum is paid to a third party – in this case, public sector recruitment agency Allen Lane, and does not reflect the salary received by Ms Middleton.

The council’s budget for a chief executive equates to approximately £240,800 while the current director of finance salary budget is £123,900. The report said the difference between the budgeted cost for permanent salaried posts and the cost of interim arrangements will be met from the council’s recurring contingency budgets and, in the case of Ms Middleton’s post, potentially including the use of flexible capital receipts.

At a meeting at the town hall, the Full Council voted to approve the recommendations to extend Mr Heaphy’s contract. The council’s Chief Officer’s Appointments Committee had earlier agreed to appoint Ms Middleton for another 12 months.

Responding to the move, Independent councillor for Longlands and Beechwood, Cllr Joan McTigue, who did not attend the Full Council meeting, said: “To pay people almost half a million pounds is ridiculous bearing in mind the financial situation the council is in now.” She also questioned why a permanent position was not advertised last September and added: “I don’t believe we can’t find two suitable people for a cost of less than half a million pounds.”

The Full Council meeting heard they were “one-off costs” as the council battles to avoid a section 114 notice. Ms Middleton who joined in April last year is also the council’s section 151 officer and would be responsible for issuing such a notice if the council cannot balance its budget this year.

Councillor Julia Rostron, chair of the council and chair of the Chief Officer Appointments Committee, told the meeting they had two options – extend contracts to two interim posts or reallocate duties of those posts to other senior managers until a permanent appointment was made. “We thought to reallocate duties would be a risk because senior managers in this council are already stretched,” she said.

“They have very limited available capacity because of the pressures of budget, pressures of transformation and the pressures of reduced staffing.” A report to councillors also outlined a timetable for the recruitment of a permanent chief executive and director of finance, with the roles set to be advertised from September and appointments starting no later than February 2025.

In a subsequent letter to staff, Mr Heaphy indicated he would not be applying for the permanent position. He said: “I have always been open about the fact that, due to personal circumstances, I am not the right person for the role in the longer term but it is pleasing that we now have a process set out to recruit a permanent Chief Executive and I share the Mayor’s confidence that by March 2025, a new Chief Executive will be in place to lead the organisation.

“The Council has experienced significant change since I arrived last March and will continue to do so in 2024. Lots of our energy has been devoted to changing our culture, improving our finances and following our corporate governance improvement journey. While we are making solid progress, there is still more to do and our focus now will turn to the future and to transforming and modernising our services.”

Mr Heaphy was initially appointed for up to 12 months last March while Ms Middleton joined last April. Cllr Rostron said Mr Heaphy and Ms Rostron were appointed on account of their skills and experience, adding: “We knew they had dealt with situations like the situation we have got in Middlesbrough.”

Executive member for finance and governance, Cllr Nicky Walker told the meeting: “I’ve likened what we need now in terms of the chief executive to a wartime Prime Minister, peacetime Prime Minister. Going forward we would need a chief exec who is here long-term to steady our ship as we go through our recovery and start to reach calmer waters.

“What we need now is different and that’s the sort of role that Clive has fulfilled. The experience that the Chief Executive and Debbie have of going through really hard times with authorities are times that we are going through and also times we want to avoid. As a team, I think they are exactly the right people for Middlesbrough now.”

Mr Heaphy was corporate director of finance and resources at Nottingham City Council between November 2020 and February 2023. Between January 2018 and March 2020, he worked at Birmingham City Council, first as chief finance officer, then as acting chief executive.

Mayor Chris Cooke said: “I have to say that Clive has been amazing as chief executive and I fully support him.” He said, as of this week, there would be performance management and an appraisal process to hold the chief executive to account on “various parts of his delivery”.

“We recognise there is a cost to this so we are trying to ensure that that performance is met,” he added.

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