Fat cat storm as retiring professor pockets £600,000

A university handed out £600,000 to its former principal as he prepared to retire.

Ministers and unions have attacked the ‘unacceptable’ payout which was given to Professor Sir Ian Diamond, 65, by Aberdeen University.

The Scottish Funding Council has now ordered Aberdeen to hold a formal review and to repay £119,000 after its investigation found a breach in financial rules.

The council, which oversees further and higher education north of the Border, said the university must launch ‘an externally-facilitated review of its governance procedures and culture’.

The findings last night sparked outrage over university ‘fat cat’ pay. But it was unclear whether Aberdeen would ask Professor Diamond for the money back. Senior governor Esther Roberton said: ‘It may not be appropriate to ask him for it back but that’s something we’ll give very serious thought to.’ Professor Diamond’s severance package was 15 times the median salary of university staff. He had announced his plans to retire in 2017 and immediately gave up many duties and responsibilities.

However, he continued to draw his £282,000 salary and did not submit his 12 months’ notice until his successor was appointed a year later. The university was effectively paying for two principals while Professor Diamond – now head of the UK Statistics Authority – was on ‘gardening leave’ following the handover to his successor.

His total remuneration – disclosed in the university’s financial statement for 2017-18 – was £601,000. That included a salary of £282,000, pension contributions of £30,000 and ‘contractual notice period payment and related expenses’ of £289,000. In addition, a payment of £60,000 was made for ‘outplacement support’.

The SFC said this was not declared, despite it being a ‘benefit in kind’. After examining more than 500 pieces of evidence, the SFC stated that, in approving the terms of the settlement agreement, there was ‘no documented assessment of value for money’.

It also identified ‘flaws’ in the conduct of Aberdeen’s remuneration committee which considered the payment. The meeting was held without staff or student representation on a Saturday morning in July 2017, having been called the previous evening. There was no evidence the committee had communicated its decision to the university’s governing body.

The SFC report said: ‘The university incurred the cost of two principals over the 2018-19 financial year. In addition, over the 2017-18 financial year, the principal received his full salary while having significantly fewer duties and responsibilities…and we have seen no evidence that the value for money consequences of that arrangement were assessed.’

The report concluded there was ‘non-compliance with several financial memorandum requirements’. Scottish higher education minister Richard Lochhead said: ‘It is clearly unacceptable that Aberdeen did not meet its grant conditions nor the highest standards of transparency that we expect of organisations which benefit from public funds.’

Mary Senior, of the University and College Union, attacked ‘unwarranted and unjustifiable pay-offs’. Miss Roberton said the university had ‘already repaid the £119,000 to the SFC’.

Asked if it had requested Professor Diamond to pay the money back, she replied: ‘No, we have not. That will be an issue for the court [governing body] to decide about.’ Professor Diamond has not commented on the report.