Following concerns by politicians and a union, an investigation into an ‘unacceptable’ £370,000 pay-off for the city’s departing tram boss will be launched
Edinburgh Trams head Lea Harrison, who was on a salary of £187,283 per year, was given the payout after he stepped down as managing director of the firm in January.
It came after the boards of Lothian Buses and Edinburgh Trams were merged late last year, which meant the city only needed one chief executive for the transport services it offers.
At Thursday’s full council meeting, council leader and Labour councillor Jane Meagher said the settlement was ‘unacceptable’.
She added: “I have questions about how such a generous settlement came about, and I think it’s critical to look at all the evidence.”
Cllr Meagher also noted that the payout was ten times the pay of an average Edinburgh resident.
Unite the Union had slammed the payout as a ‘golden goodbye’ for the transport boss, and a motion put forward by the Labour group before the meeting expressed ‘grave concern’ about it.
Earlier in the meeting, transport convener and fellow Labour councillor Stephen Jenkinson asked Cllr Meagher about the payout, and condemned it as an ‘unacceptable use of public money’.
In her response, she said: “The question to be answered is whether the settlement is in line with contractual arrangements and company procedures.
“I have asked the current board, I have asked them to satisfy me through minutes, meetings, that this was done in line with contractual agreements and company procedures.”
She added that she had asked the head of the council’s new transport board, Sarah Boyd, about taking measures to avoid a similar situation happening in the future.
Cllr Meagher concluded: “I’m assured that she has taken all steps to make sure this should not be repeated.”
Ms Boyd, who Cllr Meagher described as a ‘governance geek’, was on £226,427 in salary and benefits in the most recent financial year.
During that time, she served as chief executive of Lothian Buses to October 5 of last year, and managing director of the firm from October 6.
The Labour group motion, which was approved, noted that the new combined transport board expressed willingness to investigate the matter.
The motion also agreed an ‘immediate investigation’ into the decision to ensure ‘all relevant policies and procedures’ were followed in awarding the pay-out.
Senior executives leaving large firms are often entitled to payouts if they are made to leave their roles in certain circumstances.
Lothian Buses and Edinburgh Trams are under public ownership, but are operated on an ‘arms-length’ basis from the council, meaning they handle their affairs on their own.
Edinburgh Trams is fully owned by the council, while the council has a large majority stake in Lothian Buses along with neighbouring local authorities.
Mr Harrison took up a new job as managing director of Blackpool Trams in March.
By Joseph Sullivan Local Democracy Reporter
