Labour York Central MP Rachael Maskell called the episode a scandal and shared Labour councillors' calls for Councillor Aspden to step down.
But the Liberal Democrats, who lead the council in coalition with the Green Party, say “opposition groups continue to misrepresent an HR issue and use it for political gain, which we view to be highly inappropriate”.
Mr Sturdy tweeted: “I completely agree with the [York Conservative] councillors that York deserves better and Keith Aspden should stand down to draw a line under this sad affair.
“The independent report is shocking and makes his position untenable.”
Ms Maskell tweeted: “People across York, struggling at this time, will not understand why their money was used this way.
“The Public Interest Report is independent. The extent of this [scandal] cannot be dismissed.”
The report says Coun Aspden should have left the room when he chaired a secret meeting to agree the payout to the former council chief executive, Mary Weastell. The report says at the time of the meeting Ms Weastell had lodged an employment tribunal claim against the council and Coun Aspden, who was accused of bullying. He denies the accusations. He was advised he had no direct pecuniary interest but told to consider if he had a personal interest. He did not declare an interest.
The auditors also highlight concerns about the business case being insufficient, the council paying out more to the chief executive than it was legally obliged to and that “the reported failures to manage conflicts of interest demonstrate a pattern or evidence of systemic weakness”.
Lib Dem councillor Paula Widdowson said: “We know that there is certainly more that can be done at City of York Council to improve upon governance arrangements and, more widely, bolster existing processes. This is why we welcome the auditor’s recommendations and officers have been asked to set out an action plan based on the recommendations, which will be published soon. We will focus on delivering the needed changes to provide further assurances to councillors and residents.
“Unfortunately, opposition groups continue to misrepresent an HR issue and use it for political gain, which we view to be highly inappropriate, given the employment legislation in place which guides these processes.
“In regards to accusations presented in the media, the report makes it clear that both Coun Aspden and the council deny the allegations. Coun Aspden is clear that bullying is unacceptable and has no place at the workplace and as such the council has robust and clear policies on such matters.
“By delivering on our manifesto promise to streamline management structures at the council, this administration has saved taxpayers more than £200,000, every year, moving forward. This money will be invested back into taxpayers’ priorities, not just as a one-off, but annually. We will continue to focus on residents’ priorities – delivering the housing our city needs, tackling the climate emergency, improving frontline services and investing in communities, rather than spending money on senior management salaries or spending time on political mudslinging in the middle of a pandemic.”