The 'embarrassing mismanagement' that led to a costly mistake worth more than £100k

A report has revealed ‘embarrassing mismanagement’ which led to Oldham councillors being overpaid by more than £100,000. 

A series of human errors meant some representatives handed more cash as part of allowances received in lieu of a salary each year.

The total amount owed to the council was initially confirmed at £110k, but has since been revised to £104k due to new information. 

A total of 93 councillors were affected, with 82 overpaid, 11 underpaid and one councillor unaffected due to foregoing their allowance increases, the report confirms.

Each councillor owes or is owed different amounts due to different levels of responsibility. 

Of those who have discussed how much they owe with the Local Democracy Reporting Service, the figures range from just under £800 to almost £5000. 

Councillors will have to pay the money back and have been given the choice to return their figure in a lump sum, or as part of a payment plan. 

The investigation into how the mistake came about was launched after a councillor queried the amount they were being paid earlier this year.

The results, presented at an audit meeting on Wednesday, October 22, revealed human miscalculations, a lack of communication between departments, and a ‘complete lack’ of checks of balances to oversee the process of applying allowance increases.

Councillor Sam Al-Hamdani, who sits on the audit committee, responded with outrage to the findings, saying: “This is embarrassing.

"As a process it shows consistent flaws and there seem to be shocking individual errors – like someone has been told to do a two per cent pay rise and has ended up applying 11 per cent.

"How does that happen? Where was the structure that was supposed to be looking after this?”

Pay rates are set every year by the Independent Remuneration Panel, which then directs the council’s Democratic Services to calculate the new allowance for each individual councillor.

An employee, who has since left the council, appears to have applied incorrect percentages, or added a flat rate increase instead of a percentage increase for three years in a row. 

Because there was no process in place to check the individual’s working, the incorrect figures were passed on to the payroll department without further review.

Councillors had no way of knowing they were being paid the incorrect amounts, according to the report. 

Despite that, several councillors had reportedly come forward over the years to query their allowances – but were told ‘this is the correct amount’. 

The review, which involved officers combing through 3,384 individual payslips and countless council meeting minutes, could still not provide ‘all the answers’.

“There are some things that I cannot answer,” Shelley Kipling, CEO of Oldham Council, told the audit committee.

“[The investigation] has been hampered by the fact that we’ve had personnel changes – and this is not an excuse, but it has made it more difficult.

"When we say there are ‘no records’, in reality, some records may exist locked in the email accounts of employees who have now left the council. 

“But in terms of the summary, there has been a lack of visibility and a lack of record keeping in this process that [this report] has laid bare.

"That much is crystal clear.”

The report also revealed that several of the councillors affected have since retired from their posts.

The council is yet to reach out to former members, though there is a plan in place to do so. 

“No one was looking in the right direction,” coun Al-Hamdani concluded.

“That’s a repeatable error. We need to talk about how we’re going to address that.” 

The council has stated they have now put a new checking process in place for council allowance calculations, and further steps will be expanded in an amendment to the report before it is approved by the audit committee.

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