Full extent of £100k council blunder revealed

An Oldham councillor was paid £8,000 more than he should have done after a staff blunder, a new report has revealed. The council error meant elected members received £107,000 more than they should have done.

A series of mistakes – which council officers said were entirely the fault of staff – meant some councillors were handed more cash as part of allowances elected members receive each year for their role.

Last year, the local authority announced it was conducting a review into its finances after it emerged council staff had made mistakes.
It has now been confirmed £107,111 was paid to current and former councillors, when it should not have been, in a report presented to an audit committee.

Of the 89 councillors paid incorrectly, 76 were overpaid while 13 were underpaid. Some 38 councillors were incorrectly paid £1,000 more than they should have been.

For four councillors, this was over £5,000 though all these overpayments have since been settled. Arooj Shah was paid an additional £,5072, Abdul Jabbar an extra £5,161, Marc Hince an extra £6,934, and Junaid Hussain was paid an extra £8,461.

The report presented to councillors said the issues ‘arose from systemic weaknesses’ and ‘the responsibility for applying, administering, and ensuring compliance with the scheme rests entirely with officers’. The council said elected members ‘have no further involvement’ in the operation of the scheme once it was approved.

Key reasons why people were paid incorrected included no proper record-keeping and incorrect allowance rates. The local authority report said: “A series of actions have since been implemented to strengthen governance and reduce the risk of recurrence.

“These include the introduction of clear rules for payment start and end dates, improved processes and audit trails between services, independent verification of allowance rates, increased communication with members, and the establishment of regular quality assurance and internal audit
activity.”

Of the current councillors affected, 41 out of 45 have had their cases concluded which means the debts have been paid or a repayment plan is in place. Four cases are still in progress according to the report.

The local authority report said several former members have not responded to the council who have been overpaid.
By July 23, it is understood Javid Iqbal, Mohammed Alyas, Neil Hindle, and Norman Briggs, all named in the report, have not responded to the council. They were paid over £3,000 extra between them.

The town hall said for those former elected members, they ‘will shortly begin recovery proceedings’ in line with the council’s debt policy. They will be given 15 days to respond to a proposed repayment plan before the matter is taken further.

Alex Bougatef, director of legal services, said: “It is good that the issues have been rectified, and this matter is now being resolved. While this was not an error by members, ultimately there is a duty to the public purse, and the council must seek to remedy the financial position.”

He added: “The report also outlines the proposal to utilise the Under and Overpayments Policy and the Corporate Debt Policy to seek to recover any payments owed where members have either not repaid money or not agreed a repayment plan. This is suitable reassurance that the public purse is sufficiently safeguarded.”

Independent chair of the audit committee Grenville Page thanked the council, telling the committee: “There was quite significant discussion about all of this last year with significant challenge and discussion and it seems like significant progress has been made.”

A council spokesperson said: “We said from the outset that this issue would be dealt with openly, fairly and transparently.

“As seen in the latest audit report, progress has been made, with the vast majority of councillors engaging constructively and agreeing repayment arrangements where required. They have recognised the importance of putting this right, and we appreciate the way they have approached the process. For those yet to agree repayment plans, action is being taken to progress this.

“While this administrative error should never have happened, we’ve acted to strengthen our procedures and introduce additional checks to ensure it cannot happen again.”