Axe threat to council payments

The leader of East Riding Council, Steve Parnaby, has said a review is needed to boost staff morale, following the furore over the decision to pay 364,205 into Sue Lockwood's pension fund.

Coun Parnaby, who has defended the decision, said: "There's been an effect on staff morale and there is a lot of uncertainty at the moment.

"This review should be a top priority. It has got to be done straight away."

New applications for early retirement will be put on hold pending the result of the review, though current applications will continue to be considered.

The "open-ended" review will be conducted by a cross-party committee of councillors who will report back to the council's Tory Cabinet, which approved the payment to Ms Lockwood. Any decision to scrap the scheme would have to be voted for by full council.

Miss Lockwood, the director of corporate resources, was one of a group of senior officers to be controversially awarded a large backdated pay rise just over a year ago.

A recent "rich list", by the Taxpayers Alliance, also calculated that Ms Lockwood, who is in her mid-50s, benefited from a 17 per cent increase, taking her total remuneration package to 135,646 in 2008 to 2009.

Andrew Allison, of the Hull and East Riding branch of the Taxpayers Alliance, said: "They are probably starting to realise the public anger out there and they must be seen to be doing something. But whether they will actually do something only time will tell.

"But the discretionary scheme must be stopped."

Beverley and Holderness Tory MP Graham Stuart, who has been highly critical of the Tory-led council over the issue, said: "I welcome the fact that the council is reviewing these policies which at a time of great constraint on public spending and pressure on front-line services cannot be justified.

"Most of the expense of this policy seems to go to the highest-paid and most senior officers. For the last few years it does not seem a benefit attended to ordinary front-line workers."

The council introduced the discretionary scheme in 1999. In just eight months last year it spent more than 1.1m on 19 early retirements, of which 661,166 was spent on five people who left under the so-called 85-year rule, where people can go with full benefits if their years of pension scheme membership and age add up to 85.

Labour councillor Keith Moore said: "The terms of reference are to look again at the 85-year rule.

"We are saying in the current climate and bearing in mind the massive pay increase that was given to retain these valuable people, discretion should be used on this occasion not to allow it."

He said councillors should all be given a vote on whether to approve discretionary packages rather than it being left to a small number of Tories on the council's Cabinet.

Independent Tory Mark Preston added: "This review needs to be transparent and free from any officer and political interference.

"At the end of the day these payments come from money that could be spent on front-line services."

Cabinet members have been asked formally to reconsider their decision to approve the payment by a council scrutiny committee at a meeting on Tuesday.

Ms Lockwood is the wife of former council chief executive Darryl Stephenson, whose 36,000 pay rise in 2002 led to a protest march in Beverley.

The revelations in the Yorkshire Post led to warnings from the council's head of legal services that whoever leaked the detail could face disciplinary action.

Councils offer final salary pension schemes and across the UK had a combined pensions deficit of 53bn in 2008-09.