A council which approved a bumper pay-off for its departing chief executive has been accused of operating a culture of secrecy and of failing to provide an adequate service to the public.
East Lothian Council came in for criticism earlier this year after it emerged that John Lindsay was set to receive a £149,000 redundancy payment on top of a retirement lump sum of £155,000 after deciding to quit his post.
The controversial deal was approved before May's council elections, when the local authority was still controlled by the Labour Party.
However, the redundancy pay-off was cancelled in August by the SNP-Liberal Democrat coalition which now runs the authority.
A report published today by the Accounts Commission said the previous administration had been "unduly close" to council officials, leading to key decisions being taken behind closed doors.
"The close and long-standing relationships between elected members and senior officers have led to an informal approach to conducting council business, with many meetings being held in private," the report says.
"This has been compounded by a lack of openness in respect of decision-making.
"These relationships have not been conducive to developing an environment within which robust challenge and scrutiny of performance by elected members can take place."
The report, which looked at the performance of the council prior to the elections, also warns that "limited progress" had been made in delivering value for money for council tax payers, with services for homelessness, adult social care, building standards and food hygiene all performing poorly.
The council also had "significant weaknesses" in its financial stewardship, leaving it with low reserves and no plan for replenishing them.
Leadership of the council has also lacked vision and coherence, the report says.
Isabelle Low, the deputy chair of the Accounts Commission, said that despite a below-average unemployment rate, low levels of deprivation, an attractive environment and good transport links, the people of East Lothian had been let down by their council.
"East Lothian Council has so far made limited progress in establishing best value for its local population, which is of particular concern considering its advantages," she said.
Ms Low said she hoped the "significant changes in political leadership" since May's election would enable the council to significantly improve its performance.
SNP councillor Dave Berry, who is now the leader of the council, said the report would help the new administration to plot the way ahead.
He said: "This may be a critical report but it does help point the new administration in a clear direction for change."
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