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A council chief executive is to walk away with a £500,000 pay-off after being forced out over a personality clash.
Martin Smith will pick up the massive sum after falling out with the leader of Tower Hamlets Council.
The pay-off, which is expected to be voted through later this month by councillors, is more than he was paid in the two years he served as chief executive, when he earned more than £200,000 a year.
Mr Smith, who is currently on gardening leave, became caught up in a bitter personal dispute with the council leader, Lutfur Rahman.
At a showdown meeting earlier this month, Mr Rahman told Mr Smith: “I have no confidence in you and suggest you go home and consider your future.”
But the pay-off has caused a major row between the ruling Labour group and Conservative councillors. The Tory opposition claim Mr Rahman has engineered the ousting of the chief executive to bring in his ally, Lutfur Rahman Ali. Despite the almost identical names they are not related.
Mr Ali was appointed a year ago as £125,000-a-year assistant chief executive, despite having previously been a Labour councillor in Tower Hamlets and trying to be selected as the party's candidate for Bethnal Green and Bow at the last General Election.
Conservatives claim Mr Rahman is involved in “cronyism” and is spending large sums of taxpayers' money to achieve it.
Tory Councillor Phil Briscoe said: “As a councillor in Tower Hamlets, I am ashamed that I am linked to such a disgraceful abuse of power.”
Mr Smith, 48, was unavailable for comment after signing a confidentiality agreement. He is being given legal advice by the Association of Local Authority Chief Executives.
Alistair Robertson, of the association, said: “The leader decided he wanted a new chief executive but they do not have valid grounds to dismiss Martin.”
Mr Smith will remain eligible for a substantial pension. He started in local government at 16 and has held senior posts with Redbridge Council and the Lea Valley Park Authority.
If he has made full contributions over that period he can expect to pick up an index-linked annual pension worth around £75,000 from the age of 65.
Matthew Elliott, chief executive of the Taxpayer's Alliance, said: “His pay off will be almost three times the Prime Minister's salary, which really emphasises how absurd it really is.”
The row is the latest to hit Tower Hamlets over its use of its budget.
Despite being one of London's poorest, an Evening Standard survey revealed that last year that 15 members of staff at the council were paid six figure sums.
Reader views (5)
This stinks, he should not go, and the poor taxpayer should not have to pay this, surcharge the memebers
- Ian, London, 22/06/2009 21:52
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The reason Martin Smith is being paid 2½ times his annual salary is presumably because Cllr Rahman wants him to go away and keep his mouth shut. Unfortunately, the legally-binding nature of such compromise agreements means that we'll probably never know Mr Smith's own reasons for accepting such a deal. However, I'm sure Tower Hamlets council staff have some fascinating insights into the whole affair.
- Austen, London, 22/06/2009 21:25
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So is this how the labour party operate?
Thought they had honour?
They have lost my vote.
- D Off, london, 22/06/2009 17:00
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these councils really are starting to take the preverbial.
HOW CAN THEY POSSIBLY justify all these 'execs' on salaries nearly twice that of the Mayor or Prime Minister! is this job REALLY as stressful and experience related than running the entire country! NO WAY its Tower Hamlets for goodness sake!
half a million squid. I kick myself everyday for not entering the following professions and riding the gravy train all the way to early retirement
* Tube Drivers, - 43 days hols, 40k a year basic unfunded final salary pension
*MP - again gold plated pension, london MP wage of 70k+ unlimited expenses. EVEN better holidays.
*Local Council - a billion pound pay off if im asked to do pretty much anything that maybe against my religion,gender,sexuality,hurt my feelings/stressful.
*Thames Water Exec, - just coz you know
*Katie Price, money for old rope or what!?
- Michael James, SW1, 22/06/2009 13:52
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Dear God - Why should we the taxpayers pay for this!!!!! This country has the highest budget deficit since records began and this is why!!!!!
- Very Very Very Angry Of The Home Counties, Home Counties, 22/06/2009 13:01
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