Welsh government: Further criticism of £80k payout to former civil servant

Further criticism has been made by a spending watchdog of an exit payment to former top Welsh civil servant Dame Shan Morgan.

The former permanent secretary was paid £80,519 after the first minister asked her to leave early in October 2021.

In a report, the auditor general for Wales says some of the money was paid in a way that she was not entitled to her under contract.

But her successor said legal advice stated she was entitled to the cash.

He told a committee Dame Shan's payout could have been more expensive if it was handled differently.

The comments by the Auditor General, Adrian Crompton, follow criticisms he had already made of part of the payout in the Welsh government's accounts released in August.

Then, he said there was a "lack of evidence" about £39,000 of the payout, and who authorised it - made for extra work during Brexit and Covid.

In a report giving more detail on the payout, he questioned how the government administered £31,843 of the cash given to Dame Shan.

This was classed as "payment in lieu of notice". Mr Crompton said she was "not entitled to receive a payment in lieu of notice under the terms of her contract".

He found that it would "not have been unreasonable for the permanent secretary to seek a special severance payment", but he said because the Welsh government did not treat the payment in such a way "there is no evidence that it considered the appropriate tax treatment of such a payment".

However, Mr Crompton said that under the terms of the civil service compensation scheme Dame Shan could have received a "higher value payment than the 'payment in lieu of notice' payment she received".

Overall the auditor general said he could not be satisfied that the £80,519 payment "was properly made and, to date, properly accounted for".

Dame Shan Morgan had been appointed for a five year term stretching from February 2017 to February 2022, but left the role in October 2021.

The auditor general wrote that First Minister Mark Drakeford had requested her contract "be terminated early as the permanent secretary's successor had been identified".

"He wanted a programme of reforms to be led from the outset by the person who would be in post throughout the period of the new Senedd," the report said.

The investigation by Audit Wales meant that the Welsh government was late in signing off its accounts for the first time in 22 years of devolution.

They were published in August this year, much later than a legal deadline of November 2021.

The current Permanent Secretary, Andrew Goodall, apologised to a Senedd committee on Thursday for the lateness of the accounts.

He said he was given legal advice that Dame Shan had an "entitlement" to all the three parts of the payout.

As well as the other two parts of the payout, the remaining £9,553 covered untaken annual leave.

"I do think that value for money was a key consideration," he said, saying the offer to Dame Shan was "simply accepted - it wasn't a protracted negotiation".

He said that the payout was at the "lower end, and amongst the lowest of those departure arrangements".

"It was actually about trying to mitigate it to something that felt acceptable," he said.

Mr Goodall suggested they could have ended up with a "higher calculation", should the civil service compensation scheme been accessed by Dame Shan.

He added that if "all of the documentation had been available at all stages... I think it would have helped absolutely along the way in which we have responded to this".

A spokesman for the permanent secretary, in response to the report, said: "This was covered in the auditor general's opinion and report on the Welsh government's consolidated accounts for 2020-21 which was published back in August.

"As has already been made clear, a monetary alternative was offered as it had not been possible for the former permanent secretary to take the time off she was entitled to.

"The payment was approved in accordance with the 'Managing Welsh Public Money' principles.

"Public accounts and public administration committee scrutiny of the Welsh Government Accounts is an important part of the normal Senedd process."