Ex-NHS Tayside boss given inflated payout to avoid any tribunal, MSPs told

Bosses at a struggling health board knew their former chief executive should only have been paid three months' notice – but they gave her six months amid concerns she could bring age and sex discrimination claims against them, a Holyrood committee has heard.

Labour MSP Jenny Marra said former NHS Tayside chief executive Lesley McLay had presided "over a board in financial chaos" and was "way behind" on meeting health service targets.

The sum she received when she was replaced in April 2018 included a payment of more than £64,000 – which equated to six months' notice, but her contract only had a notice period of three months.

John Brown, the chair of NHS Tayside, conceded "mistakes were made" in the payment, which was awarded after then health secretary Shona Robison described Ms McLay's position as "untenable".

The "golden handshake" also included more than £19,000 in pension contributions that spending watchdogs at Audit Scotland said "should not have been made".

Mr Brown confirmed the pension payment has now been repaid to the board.

But Ms Marra, convener of Holyrood's Audit Committee, said: "The increase you put on this golden handshake is the equivalent to a teacher in a Dundee primary school, that teacher's annual salary. How is that a reasonable decision?"

Ms Marra, who represents the North East of Scotland, added: "I don't think the public in Tayside were looking for a golden handshake for a former chief executive who had presided over severe financial mismanagement on the board."

Senior figures at the cash-strapped health board, which was facing a budget deficit of almost £19 million in 2018-19 despite receiving just over £50 million of Scottish Government brokerage loans in the previous six years, appeared before MSPs on the Audit Committee.

Ms Marra pressed them on the payout given to Ms McLay, asking: "You were aware the contractual entitlement was three months but you increased it to six months as part of the settlement agreement?

Former chief executive Malcolm Wright confirmed: "That is correct."

MSPs heard from Hazel Craik, who advised the board over Ms McLay's departure, that her solicitors had indicated she could bring sex or age discrimination claims against NHS Tayside.

Dr Annie Ingram, strategic director of workforce at NHS Tayside, said Ms McLay had indicated she "would resign if the board would agree to six months' notice".

Mr Brown said the board had had to "balance the cost" of agreeing a payout to Ms McLay against the "cost of going down the alternative route".

Mr Wright added: "If this had gone to an employment tribunal – without any comment on the merit of whatever legal case might be brought – the value of a settlement an employment tribunal can give, if it was for age, if it was for sex, the caps are lifted on that."

Ms Craik went on to state: "My view was that for the additional money that was being sought, it was a way of bringing certainty and conclusion to matters."

She added that as money would "be spent either getting to a termination of employment or defending claims", it was "good value" to come to an agreed payout.