Lancashire County Council's £500K payment to officer probed

An investigation has been launched into why a council paid £500,000 to a senior officer before he resigned in August.

David McElhinney, who worked for Lancashire County Council (LCC), got two separate payments the leader and treasurer said they were unaware of.

He ran One Connect Ltd - a partnership between BT and LCC - which was contracted to run various LCC services.

LCC chief executive Phil Halsall is suspended in a separate probe into the tendering of the fleet contract.

'No-one briefed'

LCC leader Jennifer Mein said she and the county treasurer were unaware of two payments, £232,000 in June and £276,000 in July, until recently when auditors started to prepare the authority's annual accounts.

Mr McElhinney was taken on to work two-and-a-half days a week as the chief executive of One Connect Ltd, which looks after the authority's IT, wages, human resources and customer contact centre, on a salary of £40,000 plus bonuses in May 2011.

At the time, he also worked for two and a half days for Liverpool Direct Ltd, which has a similar partnership with Liverpool City Council.

Although Mr McElhinney was not paid any salary from May 2011 until 31 March 2013, the annual accounts published on Monday show the two cash payments appear to be in relation to the financial years of 2011-12 and 2012-13, when the council was run by a different administration.

David Borrow, deputy leader and portfolio holder for finance at LCC, said: "I am shocked that half a million pound disappears from the council's coffers without the knowledge of the council leader or the county treasurer.

"Even if this was an arrangement made by the previous administration the key thing is no one was briefed about it.

"This council aims to provide good value for money on behalf of Lancashire people and to be transparent about how it achieves that.

"People have a right to expect that and this includes keeping senior officers' pay at sensible levels and being open about our accounts."

Labour councillor Ms Mein has now launched an investigation and independent review of how much Mr McElhinney was paid and the process that led to the payments being made.

A Liverpool City Council spokesman said the investigation into cash payments was a Lancashire council issue and Mr McElhinney's salary is paid by BT not the Liverpool authority.

Mr McElhinney has not been available to comment on the payments.

LCC chief executive Phil Halsall denies any wrong-doing in the tendering process of the fleet management contract.

The decision to award the fleet contract to BT was agreed in April by the LCC leader at the time, Conservative councillor Geoff Driver.

He was replaced as council leader after the Conservatives lost overall control in the local government elections, on 6 May.