Council chiefs ready to fight 'unbelievable' pension claim

Published on Monday 21 December 2009 09:51

A FORMER council chief executive who sparked outrage by recommending his own redundancy is at the centre of a new controversy – after launching a legal bid to increase his pension. The Evening News can reveal that former East Lothian Council chief executive John Lindsay is taking the local authority to court to boost his retirement package.

The 62-year-old first hit the headlines in March 2007, when it emerged he persuaded councillors to approve a reorganisation which included his own redundancy with a payment of 149,000 on top of his pension and a 155,000 lump sum for retirement.

Mr Lindsay later resigned from the council amid the uproar and the redundancy plan was dumped after being ruled "unlawful".

The new court bid, if successful, would give him a 20,000 lump sum and boost his pension of around 50,000 a year by 7,000.

Both his former employer and the city council, which controls the Lothian Pension Fund, are fighting his claims, which one council source described as "unbelievable".

The legal battle is to go before the Court of Session, and is expected to take more than a year to conclude.

An East Lothian Council spokeswoman said: "We are aware of Mr Lindsay's action and are strongly defending against it."

Court papers show Mr Lindsay alleges that his annual pension should take into account a 15 per cent salary hike he received for using his own car for business – another of his official recommendations while in the top job.

In 2006, East Lothian Council revamped his salary deal to make the 15 per cent a "transitional allowance" which could be included in his final pensionable salary, also at his suggestion, but after Mr Lindsay's resignation the following year, city council solicitors ruled that this arrangement broke the law and refused to pay up.

Mr Lindsay is now arguing in court that the agreement should be allowed to stand. It is understood no other chief executive in Scotland is allowed to count such allowances towards their pension.

Neither Mr Lindsay nor his legal representatives could be contacted for comment on the case.

A spokeswoman for Lothian Pension Fund said: "We are unable to comment due to ongoing legal action."

The original plan to award Mr Lindsay the 149,000 redundancy payment led to an Audit Scotland investigation and a highly critical report.

The spending watchdog said the council "fell a long way short of the standards expected of public bodies".

Council chiefs examining the deal later ruled the payment would have been "unlawful" and Mr Lindsay resigned with his retirement and legal entitlements but not the redundancy money.

WHAT THE CASE IS ALL ABOUT

AFTER controversy broke out over his redundancy deal, Mr Lindsay and his employer hammered out financial terms for his departure.

The new dispute centres on a 15 per cent pay hike received in 2006 in exchange for using his own car on council business. His lawyers said that it was "specifically agreed that the contractual status of the 15 per cent allowance as pensionable was not a matter that (East Lothian Council] disputed or would dispute in future".

But after the terms of the deal were examined by city council lawyers, they said it broke rules set out by the Local Government Pension (Scheme) Scotland Regulations in 1998 and had been made "in error". Lawyers at East Lothian Council later acknowledged the alleged mistake and withdrew the deal.