Chief executive to quit as council revokes £149,000 redundancy deal

John Lindsay announced yesterday that he is to resign from East Lothian Council - at the same time as the authority agreed not to preceed with disciplinary action against him. The controversy began in February when the council agreed to award Mr Lindsay the one-off redundancy payment and retirement lump-sum of 155,000 on top of his pension of 55,000 a year. However, after the row erupted Mr Lindsay said he was no longer volunteering to be made redundant. The deal was criticised in a report by the Accounts Commission spending watchdog, which said the process by which the council made its decision "fell a long way short of the standards expected of public bodies". Mr Lindsay's decision came after a behind-closed-doors meeting of councillors accepted a report which said that the payment, agreed when Labour ran the authority, would have been "unlawful". Seven Labour councillors walked out of the meeting, held on Tuesday, before a vote which agreed to accept a report from Keith MacConnachie, the council solicitor, which concluded that the original deal did not constitute a redundancy in law. Twelve of the remaining councillors voted to accept the report that ruled any "redundancy or ex gratia payment" to Mr Lindsay "would therefore be unlawful". Last night the council revealed that Mr Lindsay, 60, who has been on "gardening leave" while the council tried to resolve the issue, had decided to resign and would also retire. A statement from East Lothian added: "The council's disciplinary investigation into the matter of his redundancy payment will proceed no further." Three councillors, one each from the Scottish National Party and Liberal Democrat ruling coalition and one Conservative, had been charged with investigating Mr Lindsay's conduct during the time the payment was agreed by the then Labour council earlier this year. The panel, which had an independent external adviser, had first to investigate whether there was a need for any disciplinary action. If it had found that there was a case to answer, then it could have recommended a formal disciplinary hearing and Mr Lindsay might have faced sanctions, ranging from a warning, through suspension without pay, to demotion, reduction in salary or even dismissal. Yesterday, however, the council said that it would not take the matter further. The three councillors did not vote when the council decided formally on Tuesday to rescind the decision to make the payment, which had originally been justified as part of a reorganisation of senior management. The council's statement, released yesterday afternoon, said Mr Lindsay would "receive the retirement payments to which he is legally entitled" from the council's pension fund. However, "to ensure propriety", the figures have been submitted by the council to Audit Scotland "for verification". The Scotsman understands that Mr Lindsay is entitled to a pension of around 55,000 a year and a lump sum of at least 155,000 when his 40-year career in local government formally ends next month. In a further development, the council also revealed that the original decision to appoint Alex McCrorie, the council's director of finance, as chief executive was also reversed. Mr McCrorie, a close friend and colleague of Mr Lindsay, will, however, continue as acting chief executive while the new council administration reviews its management structures. It is understood that the council is likely to advertise for a new chief executive as Audit Scotland was also highly critical of the original decision to appoint Mr McCrorie - from a shortlist of two - without seeking candidates from outwith the council's senior officials. Mr Lindsay's resignation brings to an end a long-running saga that has put the council, its senior official and the then Labour administration under the spotlight. Dave Berry, the SNP leader of the authority, said: "A line has been drawn under this affair and a resolution reached. "Given the Accounts Commission's very critical views on how the previous administration dealt with this matter, the new council has demonstrated that it is acting fairly and responsibly and in the best interests of East Lothian's residents." Mr Berry, who in opposition was the only councillor to raise concerns about the deal, thanked Mr Lindsay "for his service to the people of East Lothian". Mr Lindsay, who once compared his treatment by the media to that of the Virginia Tech killer, and has always refused to speak to The Scotsman, said he was proud of his work for the council. In a statement, he said: "Over the 23 years that I have been working in the community, many people have told me about improvements that have taken place throughout the county and I am proud of my contribution to that. "I would like to thank all my friends and colleagues in East Lothian and the wider community who have worked with me and helped recently, and over the past years, and I wish them health and happiness and good luck for the future." TIMETABLE OF FINANCIAL SCANDAL 1 March: The Scotsman reveals that the then Labour council had agreed to give Mr Lindsay a redundancy payment of more than 100,000, on top of a 200,000 retirement package. The chief executive himself recommended the deal to the authority. 13 April: Labour councillors are condemned for their decision to appoint Alex McCrorie, the council's head of corporate finance, to replace Mr Lindsay without first advertising post externally. 25 April: Audit Scotland, the public-spending watchdog, confirms it is investigating the affair. 5 May: The Labour Party loses control of the council in the local elections. 16 May: The new SNP/Lib Dem administration orders an inquiry into the payment. 17 May: Mr Lindsay withdraws his plans to step down, plunging the authority into crisis. 18 May: Mr Lindsay compares his treatment by the media to that of Cho Seung-Hui, the Virginia Tech killer. 20 June: Audit Scotland finds the council's handling of the affair "fell a long way short of the standards expected of public bodies". 20 July: East Lothian begins formal disciplinary action against Mr Lindsay.