Powered by Guardian.co.ukThis article titled “Chief executive who led ‘virtual-council’ total outsourcing plan leaves council” was written by Patrick Butler, for theguardian.com on Monday 4th July 2011 16.20 Europe/London

The chief executive who led a flagship Conservative-run local authority’s ambitious “big society” plans to outsource all its services to the private sector has left the council with a £220,000 pay off, just months after launching the controversial programme.

Suffolk County Council boss Andrea Hill has been on gardening leave since May while allegations of harrassment and bullying were investigated along with reports that she made innappopriate expenses claims.

The council announced on Monday that an independent investigation had cleared Hill of allegations of harrassment made by a whistleblower, and that there was no evidence she made fraudulent expenses claims.

Suffolk said the pay off made to Hill, which is the equivalent of one year’s salary, was the best it could achieve, given the “constraints of the law”.

Hill, who was chief executive in Suffolk for three years, was one of the architects of the New Strategic Direction (NSD) plans – dubbed the “virtual council” – to float off all the council’s services to private firms, social enterprises and charities.

The controversial blueprint, which could have seen thousands of council jobs lost or outsourced, was abandoned in May after widespread public opposition to proposals to cut school crossing patrols, libraries and recycling facilities.

Hill’s future was put in doubt in April after the council’s former Conservative leader resigned, making way for fellow Tory Mark Bee, who had been elected on an anti-NSD ticket. Hill had already attracted unfavourable media attention over her £218,00 a year salary, her management style and trips she made to conferences in the USA, paid for by BT, one of the council’s suppliers.

A letter sent to senior councillors in April by a whistleblower claimed Hill had overseen a collapse in morale among council staff. The letter also said the alleged “poisonous atmosphere” in the council was a factor in the death through suspected suicide of the council’s former head of legal services David White.

A spokesman for the council said in a statement: “Bullying and harassment allegations were robustly investigated by an independent firm of solicitors. Although it remains a concern that such a perception existed, the Committee is satisfied that there was no evidence to support those claims or that she was responsible for the death of David White (former Head of Legal Services). The Committee wants to reassure staff that all allegations are treated extremely seriously.

“The Committee also received a report into Hill’s expense claims during her tenure as chief executive. It has concluded that while there were undoubtedly claims which, in the current climate, might not represent best use of public money, the Committee accepted that there was no dishonesty in the claims made.

The spokesman added: “Following a lengthy discussion last Friday, and negotiations between representatives of both parties over the weekend, the county council can now confirm that Mrs Hill will be leaving her post with immediate effect.

“There has been significant media attention attached to Mrs Hill which has become a distraction and both parties accept that with new political leadership of Suffolk County Council in place, it is better to allow the organisation to move forward with new managerial leadership.”

Councils pursuing a formal disciplinary against a chief executive must by law set up an independent assessment procedure. Suffolk said its agreement with Hill meant it had now avoided paying the cost of this, estimated as in excess of £250,000. The council was unable to say what the costs of the whistleblowing investigation were.

Government spending cuts mean the council has had to find £43m in savings from this year’s budget and must find savings of £125m in all by 2015.

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