Exclusive: The shy mandarin who gave back half his redundo to the Treasury

This is an unusual story for our time. Just when the snatch it all culture from money grabbing bonus seeking bankers and utility bosses, and golden goodbyes for multi billionaires dominate the media, someone has a conscience.

In July 2012 Mick Laverty was made compulsorily redundant when the government axed West Midlands Advantage as part of the government’s closure of  all  the regional development agencies. This little bureaucracy bashing exercise  supervised by Vince Cable, the business secretary, has led to an amazing £60m in payouts to the 2300 staff. According to a report from IPPR North (http://www.ippr.org/images/media/files/publication/2013/03/UKfirst-northern-FDI_Mar2013_10500.pdf ) it has contributed to Britain’s downturn outside the bloated London and the South East with inward investment dropping drastically,particularly in the North and Midlands.

Mick Laverty: the shy mandarin who gave back half his redundo; Pic reproduced with permission Student Loans Company

Mick Laverty: the shy mandarin who gave back half his redundo; Pic reproduced with permission Student Loans Company

Among the super size redundo package was an award of £14o,772 to Mick Laverty – and the last accounts of the agency record he got some £351,000 (including the redundo) in the last 15 months in the job.

At the time the Department of Business Innovation and Science said none of these highly paid mandarins were going to get any new jobs in Whitehall.

And yet just six months later he was appointed as the new chief executive of the Students Loans Company to replace Ed Lester – a name familiar to this website after his amazing deal where he avoided paying tax or national insurance at source led to a huge crackdown across Whitehall when Danny Alexander, chief secretary to the Treasury, discovered 2500 civil servants were doing the same thing.

And guess who approved his appointment none other than the Department for Business. Furthermore as is reported in Exaro News, his salary is £160,000 a year plus up to £25,000 in bonuses, some £45,000 more than his predecessor. See http://www.exaronews.com/articles/4902/ed-lester-to-depart-from-student-loans-company-this-month

But there is a rather nice silver lining – at least for the taxpayer. To his credit Mick Laverty decided to return £82,117  redundo to the Treasury entirely as a voluntary gesture since he is entitled to the money under the Civil Service Compensation Scheme. I tried to talk to him about it but he seems very publicity shy and wouldn’t comment. People around him say he believes it was the right thing to do as he was only six months without a job.

If only some of our other big fat cats in Whitehall,local government  and the banks thought the same Britain might be a fairer place. But sadly the National audit Office tell me that is very rare in Whitehall, they didn’t know of another instance.

How Michael Gove plays fast and loose with taxpayers money on school redundos

 ImageOne would expect a right-wing Tory like education secretary  Michael Gove to be pretty diligent on how he spends taxpayers cash. You wouldn’t expect him to spray public money around without Treasury approval and then tell auditors  to get lost if they pick him up on it.

This is exactly what he has done  by handing out extra cash to his beloved school academies so they can  buy staff  redundos with extra payments without bothering to get it cleared by the Treasury.

And when this was rightly picked up by the National Audit Office – the independent Whitehall body that scrutinises taxpayers’ cash –  he has had the cheek to demand that the NAO and the Treasury go away and forget it.

The row is revealed by me in a piece for Exaro News (http://www.exaronews.com ) this month after the NAO took the decision to qualify the £6.1 billion accounts of the quango that funds academy schools ( now merged into a wider body ) after it found  14 cases of excess severance payments, totalling just under £230,000 at nine academies.

This may not sound much but it only found out about them after checking accounts of 135 academics – just eight percent of them. The other 92 per cent of academy accounts were never scrutinised by the quango. If this figure were applied pro rata the number of excessive unapproved redundo cash would top nearly £3m.

Now this may be good news for the people involved but it seems to me like a repeat performance of what happened in the Thatcher era where millions of pounds of taxpayers money were paid out in early retirements just when cash was short. The result was worse as many of these people are probably still claiming pensions now.

Don’t get me wrong I am not against people getting a good redundo deal ( I got one myself in the private sector) but I do think that where public money is concerned the deal should be scrutinised by the Treasury first. Otherwise every pound paid out on top of normal redundo is being taken out of paying for kids education.

Amyas Morse, the head of the NAO, writes in the report: “YPLA ( the now defunct quango) has not required academies to notify them of severance cases or any other payments that require Treasury approval, and so I have concluded that the assurance framework that YPLA had in place for the financial year was not capable of identifying and managing all cases.”

“I have been unable to confirm that, in all material respects, grants to academies conform with the authorities that govern them, and have been applied for the purposes intended by Parliament.”

Michael Gove’s response was: “We do not believe that we need approval for these payments because maintained schools are not required to submit them. We are working with the NAO and HM Treasury on this.”

This conveniently leaves out the fact that these schools are responsible to the  directly elected local authorities, academy schools are responsible to unelected civil servants.

My solution is simple. If Michael Gove wants to spray  taxpayers’ money around in this way, he should pay for it himself. After all the  excellent new search the money website (http://SearchTheMoney.com/) reveals he has received £462,000 in donations, £304,000 from one private equity firm). So he could raise the money for this excessive payments and leave the taxpayer to fund what it should do-public education.