Liverpool City Council chief executive Ged Fitzgerald has stepped down temporarily after he was released on police bail following his arrest by officers investigating financial irregularities at Lancashire County Council.
Fitzgerald, who was formerly chief executive at Lancashire, is understood to be one of four men who were questioned by police on suspicion of conspiracy to pervert the course of justice and witness intimidation.
A statement released by Liverpool mayor Joe Anderson said Fitzgerald had not been suspended or faced any disciplinary process.
But he added Mr Fitzgerald would also be relinquishing his role as interim head of paid service for the Liverpool City Region Combined Authority during the investigation.
“This decision has been accepted as the right decision for the city and to enable the council to deliver services without distraction,” Anderson said.
“There is no intention to appoint an interim chief executive and the requirements of the role will be covered by myself as executive mayor supported by the senior management team in this period.”
In 2013, the police launched an investigation into concerns about payments relating to the One Connect outsourcing deal signed with BT.
A spokesperson for Lancashire Constabulary said that four men aged 72, 55, 58 and 56 were arrested on Monday at addresses in Preston and Merseyside.
She said: “The arrests are part of a wider long-running investigation into allegations of fraud, although none of the men have been arrested today on suspicion of fraud.”
After being interviewed yesterday by police, they were released on bail until 19 June.
One Connect was created in 2011 to run back office services, with a target of saving £400m over 10 years.
However, in August 2013, Phil Halsall, also a former chief executive at Lancashire, was suspended after allegations surrounding the award of a £5m fleet maintenance contract.
That same year, the council investigated payments in excess of £600,000 to David McElhinney during his spell in charge of the joint venture.
One Connect was scrapped in 2014, with a new wholly-owned BT company taking on responsibility for ICT, revenue, benefits and payroll services, while other staff returned to the council.
