Ed Balls: Sharon Shoesmith Baby P payout 'leaves a bad taste'

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Media captionEd Balls: "The idea that she has received a pay off after what happened to Peter Connelly leaves a bad taste in the mouth"

A six-figure payout to the ex-head of Haringey children's services "leaves a bad taste in the mouth," shadow chancellor Ed Balls has said.

Sharon Shoesmith, who earned £133,000 a year, won a ruling in 2011 that she was unfairly sacked after a damning report into the death of Baby Peter.

BBC Newsnight revealed the payout could cost Haringey Council up to £600,000.

In a statement Ms Shoesmith bid a "final farewell" to Haringey, adding she hoped to resume work with children.

Peter Connelly, who was 17 months old, died in 2007 after months of abuse.

The boy had more than 50 injuries, despite being on the at-risk register and receiving 60 visits from social workers, police and health professionals over eight months.

'Botched job'

Three people were jailed in 2009, including his mother.

The Court of Appeal concluded Ms Shoesmith had been "unfairly scapegoated" and her removal from office in December 2008 by the then Children's Secretary Ed Balls had been "intrinsically unfair and unlawful".

One government source told BBC Newsnight that the cost to Haringey Council could be as high as £600,000, although Ms Shoesmith is expected to receive a lower sum.

The exact figure may not emerge as there are confidentiality clauses preventing its disclosure but it will be significantly short of the £1m figure it had been reported she was seeking.

However, it would appear the package is more than the minimum suggested by senior judge Lord Neuberger in a 2011 ruling in the Court of Appeal. He suggested Ms Shoesmith was entitled to a minimum of three months' salary plus pensions contributions.

Three months' salary would have been about £33,000.

Mr Balls said his decision in 2008 as children's secretary to remove Sharon Shoesmith from her job had been right.

He told the BBC: "An independent report said there were disastrous failings in Haringey children's services.

"They said the management was at fault. Sharon Shoesmith was the director of children's services and so of course it leaves a bad taste in the mouth that the person who was leading that department, and responsible, ends up walking away with, it seems, a large amount of money."

Earlier, Conservative MP Tim Loughton said the payout became "inevitable" after the Court of Appeal ruled that Mr Balls "had made a complete botched job of her dismissal".

But he added: "This is going to leave a really bad taste in taxpayers' mouths that a not insubstantial amount of public money is being used to pay off somebody who presided over a dysfunctional department in Haringey [where] a 17-month-old boy died in horrific circumstances."

Gove 'furious'

Care minister Norman Lamb said what happened in the aftermath of the Baby P's death was "extraordinary" but he was not in a position to judge the authority's decisions.

"But it is pretty shocking, the scale of the reported payout, given what tragedy unfolded in that particular borough."

In her statement, posted on an online networking site, Ms Shoesmith said: "A final farewell to Haringey as my case concludes. I wish those of you in children's services, especially in Haringey, success, strength and courage in all that you do.

"Children have been my life's work and I hope to continue in some capacity soon now that my PhD is almost complete."

A statement from Haringey Council confirmed it had reached a settlement with Ms Shoesmith but that the terms of the settlement were confidential and it was unable to comment further.

Some of the cash will come from central government, but Haringey council will foot most of the bill, it is understood. An exact figure is yet to be agreed.

Image caption The Court of Appeal ruled Ms Shoesmith had been "unfairly scapegoated"

The Department for Education declined to comment on the story when contacted by the BBC.

But one source told Newsnight that Education Secretary Michael Gove was "furious" about the secrecy over the amount paid to Ms Shoesmith, believing it to be "indefensible".

Downing Street said the Department for Education's contribution to the payout would be made public.

Lawyers representing Haringey Council and Ms Shoesmith had been in lengthy discussions regarding a settlement since the May 2011 ruling.

Ms Shoesmith had been due to return to court later this week, seeking a declaration that she remained employed by Haringey Council.

That action has now been dropped and the settlement reached between the two parties is understood to be a final one.

Peter Connelly's mother, Tracey Connelly, her boyfriend, Steven Barker, and his brother, Jason Owen, were jailed in May 2009 for causing or allowing the child's death.

Earlier this month it was reported that Connelly was due to be released from prison on parole.

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