Financial ombudsman rebuked by MPs over handling of ex-chief's ‘dismissal'
The peer and chairwoman had been asked by MPs to explain why Ms Thomas had stepped down from her role as chief executive of the Financial Ombudsman Service (FOS) and whether any severance package was agreed.
She declined to do so, saying only that the move had been a 'mutual agreement' and citing her 'duties to safeguard the wellbeing of our employees' and 'protect the interests' of the ombudsman service.
In a letter to the committee on February 19, Baroness Manzoor claimed that 'as a member of the House of Lords, I cannot be required either to attend before the committee, or or to answer its questions,' the report says.
In Monday's report, MPs said that 'although this argument was strictly true' because Commons committees have no power to compel the Lords, 'it was unnecessary and disrespectful'.
Following Baroness Manzoor's letter, the committee ordered the FOS to submit details of any severance deal or financial package and any confidentiality or non-disclosure agreement negotiated between the service and Ms Thomas.
Although the FOS complied with the order, the committee has not published the details, claiming its decision not to do so reflects 'our awareness of the need to balance transparency against fairness to individuals.'
In its report, the committee sums up the reason for Ms Thomas' dismissal as a 'collapse in confidence' driven by 'fundamental disagreements' over strategy and operations between the board and the former chief executive.
'This collapse in confidence covered a broad range of issues and was not driven by a single event or topic,' it says.
'The mutual collapse in confidence led the FOS Board to dismiss Abby Thomas.'
Treasury Committee chairwoman Dame Meg Hillier said the service's failure to block Commons scrutiny should send a 'clear message' to others seeking to frustrate the process.
'I'm afraid that the handling of this situation by the senior leadership of the Financial Ombudsman Service has been deeply disappointing,' she said.
'The attempt to frustrate a House of Commons Committee from scrutinising the actions of a publicly accountable organisation ultimately proved unsuccessful.
'I hope this sends a clear message to any organisation considering similar action in future that Members of the House of Commons will have answers to the questions they ask on behalf of the British public, whether senior officials attempt to block them or not.'
Baroness Manzoor said: 'I highly value the Treasury Select Committee and the important role it plays in holding the financial sector to account.
'I am committed to providing open and transparent evidence to the committee, but there are rare instances when that can be difficult – particularly when it relates to employment matters.
'I have always treated the committee with the utmost seriousness and respect, and I know the Financial Ombudsman Service will continue to work closely with them in the future.'
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