THE UNTOLD STOREY (PART 2): Henshaw confronts Storey

The Storey so far: Liverpool city council have turned down a £340,000 pension deal for chief executive Sir David Henshaw, who has announced publicly that he will now be taking early retirement in March 2006. Within days of headlines about the pension dispute and his impending retirement, Henshaw suspends the council's media chief Matt Finnegan on a pretext that dates back four years. This leaves the way clear for Henshaw to try to re-build his public position.

Council leader Mike Storey was confronted by Henshaw a month later on April 21, following a Capital of Culture meeting.
Storey says:

"He informed me that as part of the investigation into Matt Finnegan, (right) they had taken his PC for examination and going through several hundred emails, had come across some emails from myself which he felt were extremely damaging and serious and we needed to think carefully how to handle this as it could be potentially dangerous, both for the city and myself.

"I felt his mood was grave and threatening. I felt he was being aggressive and intimidating. I made no comment to him about this and he suggested that I speak to one of my council colleagues, Paul Clark, who is also a barrister."

Clark then met Henshaw on Saturday April 23rd. Paul Clark's notes of the meeting recount how Henshaw "has had enough and wants to go."

Clarks (below) says: "DH (Henshaw) wants the following deal:

1) A press release has to be issued - "co-conspirators have to be stopped"

2) Wants to establish that peace has broken out.

3) MJS (Storey) to specifically call the press and to telephone Larry Nield (Daily Post journalist) and Rex Makin (Liverpool solicitor)

4) MJS to telephone Local Government Chronicle and Municipal Journal - verbalise the press release.

5) Meeting of the Appointments Panel (the council subcommittee that turned down a pension deal for Henshaw) probably after 5th May, 2005

a) DH to retire on 30th March 2006
b) Sub committee awards him from the day extra pension years
Sub committee begs CX (Henshaw) to reconsider and to continue working. In the event of them being successful in persuading him to stay, the extra pension years will be rescinded.

6) Consultants to review the pay of senior management (McElhinney and Halsall)

7) DH be allowed to do other duties during the notice period and receive remuneration from those other duties.

8) Council go to market place for replacement chief executive in September.

Storey says: "I agreed to the points raised but had concern over a press release which asked the press to apologise to David. I felt that I could not say this. Henshaw...insisted on this line, or there would be no deal. I felt compelled to agree.

"The press release was issued by my office on Monday 25 April as agreed although Mr McElhinney had organised for the newscentre to issue the agreed statement as well."

So Henshaw used the discovery of Storey's emails to Finnegan to force a better pension deal for himself. This is demanding money with menaces - or blackmail.

The council Leader has now also agreed that Henshaw can retire with the pension deal which the council had already turned down. He has also left the way open for Henshaw to change his mind about retiring after apparently agreeing the sub-committee will "beg him to stay."

Storey has also agreed to a grovelling press statement which attempts to patch up their differences and pretend nothing is wrong. And Storey has agreed that Henshaw can earn extra money during his notice period and that his chief lieutenants, McElhinney and Halsall will have their pay reviewed.

All this in return for Henshaw agreeing to retire in March 2006.

NEXT: Henshaw changes his mind and mounts a coup d'etat; "his behaviour is unbelievable"; Henshaw faces disciplinary action.