Ex-SFO chief attacked over payments

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The former director of the Serious Fraud Office has come under fire for allegedly sanctioning severance payments to senior staff totalling almost £1 million without getting the necessary approval.

Richard Alderman was grilled by the House of Commons Public Accounts Committee just days after the publication of a scathing inquiry into the payments, commissioned by his successor as head of the SFO, David Green.

Committee chairwoman Margaret Hodge described some of Mr Alderman's actions as "shocking and against every principle of how public service organisations should operate". Another member of the cross-party committee described the way in which he agreed ex-gratia payments worth £15,000 on top of the departing executives' pay-offs as "like Fred Karno's circus, not the Serious Fraud Office".

The SFO's former chief executive, Philippa Williamson, left last year with a severance package of £464,905, while former chief capability officer Chris Bailes received £473,167 and technology head Ian McCall £49,885. The exit package for Ms Williamson, totalling more than three times her salary, was so unusual the National Audit Office qualified the SFO's accounts.

The report by senior civil servant Tim Hurdle found it was "difficult to conclude" that Mr Alderman took "sufficient steps to ensure that his chosen course of action represented good value for money". Mr Green revealed that the Treasury has blocked Mr Bailes' ex-gratia payment as "irregular", even though he has received legal advice it is contractually enforceable.

The current SFO director contradicted his predecessor on a series of key points, and disclosed that the agency had been unable to find any documentary evidence explaining a promotion and pay rise received by Ms Williamson.

In a stormy committee hearing, Mr Alderman insisted that the pay-offs were necessary because it had been made clear that Ms Williamson, Mr Bailes and Mr McCall would "get their marching orders" when Mr Green took over in 2012. He insisted that his office sought approval from the Cabinet Office for the severance payments.

But Mr Green insisted he had never been asked whether he was planning to clear out the top ranks of the SFO when he arrived. He told the committee he had "an open mind" on the issue, but wanted to end "exotic" arrangements under which Ms Williamson worked at her Lake District home for two days a week and then received travel and hotel expenses totalling £27,600 a year to spend three days in her London office.

Mr Alderman denied that he made Ms Williamson's and Mr Bailes' redundancy decisions alone, telling the PAC that the Hurdle inquiry made no attempt to trace the phone or email records which would show that a colleague at the SFO had sought Cabinet Office approval.

The National Audit Office told the hearing it had seen no documentary evidence of Cabinet Office approval, and Ms Hodge said: "The feeling I get is that you ran a pretty informal system there. You took the decision to put all your top team through redundancy, you don't appear to have consulted anybody on that, you negotiated the terms yourself."

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