Pembrokeshire County Council's bid to pay-off chief executive Bryn Parry-Jones has been thrown into utter chaos this afternoon (Wednesday) after the Wales Audit Office blocked the payment.

The Audit Office said the payment would incur unlawful expenditure and the council cannot now make the £330,000 payment until the situation is resolved.

A notice on the Wales Audit Office website, this afternoon, said: "The Appointed Auditor, Anthony Barrett, served Pembrokeshire County Council with an advisory notice on Tuesday 28 October 2014 because he has reason to believe that the Council’s decision to enter into a settlement agreement with the Chief Executive will incur unlawful expenditure.

"The effect of the Advisory Notice is to stop the Council from lawfully implementing the decision, while the Notice is in place."

Mr Barrett’s statement refers to the inclusion in the agreed settlement to pay supplements previously declared unlawfu, and their inclusion in the calculations made when negotiating the pay-off.

“The proposed settlement agreement approved by council on 16th October 2014 involves the Council unlawfully taking into account the said (unlawful) pay supplements in calculating a payment to the Chief Executive in lieu of 3 months’ notice, in calculating an enhanced severance payment to the Chief Executive and in making payment of further (unlawful) pay supplements to the Chief Executive in respect of the period April 2014 to October 2014,” he said.

He added that the decision to enter into a settlement agreement on those terms would itself be unlawful because it was “beyond the powers of the council; involve the council misdirecting itself in law and involving the council taking into account an irrelevant consideration”.

Mr Barrett has examined the decision by Full Council on October 16 where it was agreed to enter a “settlement agreement” with Mr Parry-Jones to “terminate the employment of the chief executive on financial terms which I am advised are unlawful”.

Until the issues are resolved the financial pay-off for the chief executive – due to leave his post at the end of the month – cannot be paid.

Mr Barrett said: After careful consideration, I have reason to believe that Pembrokeshire Council will incur unlawful expenditure if it continues its current settlement agreement with the Chief Executive, Bryn Parry-Jones.

“For this reason, I feel have no option but to exercise my statutory responsibilities and take this unprecedented action.”

UPDATE: Pembrokeshire County response:

"Pembrokeshire County Council and its legal advisors have been in discussion with the Wales Audit Office since before the meeting of Council on the 16th October and have reached a consensus on the phrasing of the Settlement Agreement with the Chief Executive.
"This resolves the concerns of the Auditor.
"The Council has been advised by the Wales Audit Office that the Advisory Notice will be withdrawn tomorrow, Thursday, 30th October.
"The Council will not be incurring any unlawful expenditure."