Cambridgeshire and Peterborough CA mayor James Palmer (Con) has dismissed interim finance director and section 151 officer Karl Fenlon after only four months of service.
Mr Palmer told a CA meeting this morning that Mr Fenlon had left the authority with “immediate effect” saying that he gave “misleading information” about the CA’s finances at a meeting on Monday.
Mr Palmer said in a statement: “[Mr] Fenlon acted without prior notification to the CEOs and gave misleading information to scrutiny, failing to take note of timelines for schemes and of the full review of the authority currently being carried out by John Hill.”
A spokesperson for the mayor said the decision to terminate Mr Fenlon’s contract was “clearly regrettable”.
Mr Fenlon is the fourth interim finance director to leave the CA since the body was formally established in March 2017, and is the latest senior officer to leave under a cloud. Deputy section 73 officer Noel O’Neill will now take on the financial responsibilities for the CA.
LGC previously reported how chief executive Martin Whiteley suddenly left the authority at the end of August and received a £94,500 payout. Opposition councillors alleged Mr Palmer had personally dismissed Mr Whiteley, and therefore breached the CA constitution because that decision could only be made by the CA’s board. Concerns were subsequently raised by all but one of the area’s council chief executives.
According to Michael Sargeant (Lab), a Cambridge city councillor who sits on the CA overview and scutiny committee, Mr Fenlon spoke candidly about his concerns over the authority’s financial resilience on Monday. Mr Fenlon reportedly told the overview and scrutiny committee he was working from a “zero-base budget”, meaning the previous budget was no longer being adhered to, and added he had been working to separate the revenue and capital accounts.
Cllr Sargeant said: “We were looking at the draft budget and also the medium term financial plan and I said it would be useful if we could have this year’s budget alongside it. Karl then basically said the budget was so different to the real world that he wasn’t using it anymore.”
Mr Fenlon was then asked by the mayor to read out a clarification statement at a CA board meeting on Wednesday - a request he refused to carry out.
Mr Palmer apologised at that meeting after it emerged the CA had overspent its workforce budget by almost 10 times the amount pledged in the mayor’s election manifesto. Costs for the current year are expected to reach £7.6m, while Mr Palmer originally pledged in 2017 to keep staffing costs below £850,000 a year.
Mr Palmer said: “I can only apologise. I underestimated the cost of running such an important authority. I think, realistically, we were never going to be able to function on £850,000 a year.”
A spokesperson for the mayor said Mr Palmer appreciated the costs were high but added it reflected the top-heavy nature of staffing for an infrastructure-led organisation.
Reacting to today’s news, a number of opposition councillors renewed their call for a “full and independent review and audit” of the CA’s finances in order to restore faith in the authority’s leadership.
Cambridge City Council leader Lewis Herbert (Lab) said: “There has been far too much uncontrolled spending this year, particularly before our latest section 151 officer took a much firmer grip on financial management.
“There needs to be a transparent and clear audit trail on how future combined authority plans will be funded, and how excess operational costs and consultancy budgets will be brought under control so that spending focuses back on the infrastructure and improvements that our whole area so badly needs.”
Lucy Nethsingha (Lib Dem) described Mr Fenlon’s departure as an “extremely worrying development”.
Cllr Nethsingha said: “The scrutiny committee have been asking for clear financial papers since June. Last week at the meeting on Monday we finally got a clear analysis of the state of the combined authority budget, with a clear split between revenue and capital spending.
“We know that Karl had spent months getting this situation clear.
“For the CA to then lose the first financial director who appeared to be getting to grips with the financial situation only a few months before the CA budget is due to be signed off would be very worrying indeed.”
A number of councillors told LGC Mr Fenlon was not considered to be a “typical officer” as he could speak in an unguarded manner at times.
Cllr Sargeant said: “I found he was very refreshing in terms of his openness and honesty; it’s a great loss. He quickly got to grips with the CA’s challenges. He admitted on Monday that he still had a lot of work to do in separating out the capital and revenue accounts which were mixed in together.”