Council probe launched into 'excessive' £327,000 payout to former Edinburgh Trams boss

Edinburgh councillors have launched an investigation into a £327,000 severance payment made to the former managing director of Edinburgh Trams.

The payment was made after Lea Harrison left the company in January following the integration of Edinburgh Trams and Lothian Buses under a single board structure.

Harrison took up a new role as managing director of Blackpool Trams in March.

An administration addendum to the council’s annual accounts report states that councillors note “with grave concern” the compensation paid to the former Edinburgh Trams managing director and consider it “excessive”.

The addendum notes that the decision was taken by the previous Edinburgh Trams board but says the new board has shown a willingness to investigate the matter.

Council leader Jane Meagher said she “cannot see any justification” for the payout.

“While this was a decision taken by the former board of Edinburgh Trams, I am deeply concerned and disappointed by the scale of this compensation package,” she said.

“We rightly expect our council companies to deliver value for money, and I cannot see any justification for someone already on such a high salary receiving this type of pay-off for leaving their job.

“We have written to the chair of the new board asking them to investigate whether proper procedures and board approval processes were followed in the agreement of this package.

“We now have a new relationship with the tram company – a new chair and a new board – and have strengthened our oversight and reporting arrangements to make sure this can never happen again.”

Councillors agreed that an immediate investigation is required to establish whether all relevant policies and procedures were followed when approving the payment.

The payout has attracted criticism from Unite, which described it as an “excessive golden goodbye” and questioned the governance arrangements that allowed it to be authorised.

Unite has also raised concerns over a separate £120,000 severance payment made by Lothian Buses to a former director, according to documents due to be considered by councillors on Thursday.

Unite industrial officer Lyn Turner said there were “serious questions” over how the payments had been authorised.

She said: “Serious questions arise about why such excessive golden goodbyes were authorised by both Edinburgh Trams and Lothian Buses. Where was the governance?

“An immediate inquiry must be held by the council because it appears that there were no proper checks and balances in place.

It’s a disgrace, and the people of Edinburgh should be outraged.”

Unite general secretary Sharon Graham added: “These payments are an abuse of public funds.

“The money would have been far better spent on improving the transport network, and workers’ terms and conditions. It’s nothing short of a scandal, and action must be taken.”