The Treasury fined Theresa May’s Home Office after she gave the former head of the child abuse inquiry a salary of £500,000 per year, it has emerged.
May had failed to follow the proper government rules for negotiating contract terms when she appointed Dame Lowell Goddard to lead the inquiry.
The chief secretary to the Treasury is required to sign off on pay packages worth more than £142,500 but the former home secretary only obtained retrospective approval.
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The Treasury – which was then led by George Osborne, now a frequent critic of May – subsequently imposed a £366,900 “exemplary fine”.
The details, which were buried in the Home Office’s annual accounts, were uncovered by MailOnline.
May appointed New Zealand judge Goddard to lead the inquiry in February 2015, though she resigned 18 months later.
The Home Office’s document read: “The Home Office paid an exemplary fine of £366,900 after securing retrospective approval from the chief secretary to the Treasury in relation to breaching the control process in negotiating the salaries of the chair of the Independent Inquiry into Child Sexual Abuse as well as each of the four panel members of the IICSA, in financial year 2015-16.”
Civil service rules dictate that “the approval of the chief secretary to the Treasury is required for civil service appointments and appointments to public sector bodies which are subject to ministerial approval where the pay and remuneration package is above £142,500”.
Labour MP Chris Leslie, the former shadow chancellor, called on May to explain why the proper processes were not followed.
“Not only was that whole episode a complete disaster but it turns out the massively generous pay package was itself a debacle, flying in the face of the most basic checks of the Treasury's rules and costing the taxpayer even more money,” he told the Mail.
“Even if Theresa and George were not on speaking terms they should have at least had her officials do this in the proper way.”
The tensions between May and Osborne have been underlined since the latter used his new role as editor of the Evening Standard to attack the direction of the government.