Councillors have voted to approve the appointment of a new interim chief executive despite the “astronomical cost”.

Clive Heaphy has beaten 10 other candidates to the top job and will replace outgoing chief executive Tony Parkinson whose last day is Friday, March 24. The new head of the council will be employed for up to 12 months with the local authority’s costs for the position capped at £234,000.

Mr Heaphy has most recently been employed in local government by Nottingham City Council as a corporate director responsible for finance and resources. During his stint, he uncovered unlawful payments totalling £15m between Nottingham City Homes and the local authority. Prior to this, he served as acting chief executive at Birmingham City Council between August 2019 and March 2020, he left after not securing the top job on a permanent basis.

Independent Middlesbrough mayor Andy Preston said: “Everybody knows we are in a financially extraordinarily difficult position. In fact, the precarious situation that we are in will be made infinitely worse if we don’t save millions of pounds this coming year in our children’s services department.

“We need somebody with the skills, experience, time and determination to get inside that department and guarantee those savings.”

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He added that the council would be at risk of bankruptcy in the future if savings were not made. Mr Preston admitted the costs might seem ‘“toe-curling” but Mr Heaphy was the “best man for the job”.

Mr Preston said that Mr Heaphy will be required to work three days in the office and can work two days from home. In response, Cllr Allan Bell said: “If we are paying him that much money, he should be here five days a week, it’s so important for our children’s services.”

Permanent recruitment for a new chief executive can take up to five months, which is why an interim appointment is required. Conservative deputy mayor Cllr Mieka Smiles also raised the issue of costs at Wednesday’s full council meeting. She said: “I have been very concerned about this appointment.

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“It’s not to do with Clive as a candidate, he’s a great candidate, and he obviously has all of the right credentials for the post, it’s more to do with the astronomical cost that it will take up of our very stretched cash. It makes me feel really uncomfortable.”

She said she had agonised over the decision but would ultimately vote in favour as the new top boss would not take home more pay than Mr Parkinson and she was concerned government commissioners would intervene which would cost even more.

Cllr Tom Mawston, who is the chair of the chief officer appointments committee, was also concerned about government intervention if a chief executive was not appointed.

The potential £234,000 cost to the council includes Mr Heaphy’s salary, his pension and national insurance contributions and costs to the Chartered Institute of Public Finance and Accountancy (CIPFA) for its expertise in providing an experienced interim chief executive. Mr Heaphy is a consultant at CIPFA and is being hired via the organisation.

Mr Parkinson – who is paid £155,000 a year and is the council’s longest-serving chief executive having been in the role since 2016 – is set to depart on March 24. He has a local government career spanning 33 years and decided to step down just one month after a no-confidence letter urged him to resign.

In a statement, he said he “loved every minute” of his time in Middlesbrough and added that “it is the right time to hand over the reins.”

The council paid CIPFA £30,000 to carry out an assessment of Middlesbrough Council’s financial standing during the 2023/24 budget process. The organisation was also tasked with carrying out a review of the culture at the local authority following an explosive audit report in July 2022 which found a pervasive lack of trust between officers and politicians.

The subsequent CIPFA report claimed that council staff had reportedly been bullied and intimidated, and were embarrassed by politicians’ behaviour.

Nunthorpe councillor Jon Rathmell asked whether the local authority would be parting ways with CIPFA, which is still carrying out work, due to a potential conflict. Monitoring officer Charlotte Benjamin said it was not clear at this point but the council would be looking into it.

At the meeting, councillors also approved temporarily designating the local authority’s head of financial planning and support Andrew Humble as the section 151 officer, the position that assumes responsibility for the council’s financial affairs. This comes as Helen Seechurn, who is the current section 151 officer, is due to leave the organisation at the end of next week.

Once the new chief executive is in post, it will be up to him to make the interim section 151 officer appointment.

The new chief executive will be taking over at a challenging time amid governance issues, stretched finances and concerns over children’s services. In January, Middlesbrough Council received a Best Value Notice, which is a notification that informs councils they are not meeting expectations. It will be in place for 12 months and improvements are expected at a significant pace.

The letter, addressed to the council’s outgoing chief executive Tony Parkinson, has stated ministers in the Department for Levelling Up, Housing and Communities (DLUHC) have concerns about the local authority. It added that Mr Gove will consider powers to inspect or intervene in the council if there is a failure to improve.

As part of this year’s budget process, councillors voted to implement £12.4m worth of cuts to help plug a £14.9m shortfall. The council’s children’s services, which were rated inadequate in 2020, are a huge strain on its finances and an improvement plan has been signed off to try and get a grip on the department’s spending.

For the 2022/23 financial year, £38m was signed off for children’s care, however, the latest figures suggest that almost £56m will be spent by the service area this year. As part of Middlesbrough Council’s £126.4m budget proposals for 2023/24, children’s care will receive £54.6m.