A housing association boss was given a pay-off of more than £200,000, despite a pledge by regulators to rid the sector of excessive severance pay.

Annual accounts of the Downland Housing Group, based in Haywards Heath and Chichester, show the former managing director, Bob Herbert, was awarded £233,291 on his early retirement last March on top of his £117,000 salary.

The sum included £82,031 as compensation for loss of office, plus a pension enhancement of £151,260.

New management at the organisation, which is now part of the Downland Affinity Group and runs housing association schemes throughout West Sussex, tried to stop the payment.

However, the group was advised by lawyers and housing corporation officials that withholding the money would be in breach of the 58-year-old's contract. The payment to Mr Herbert underlines that the housing corporation is powerless to stop lucrative payouts continuing.

In 2001 Downland's board agreed to a revised contract for Mr Herbert as a way of encouraging him to continue in the post while the association was in merger negotiations with Drum Housing Group. At that stage Downland Affinity Group was not involved.

Those negotiations broke down but Mr Herbert's new contract still stood, including a clause to allow him to draw his pension early.

The board now says it did not realise how much it would cost to honour Mr Herbert's contract.

A spokeswoman for Downland Affinity said: "We are asking people to please learn from this. When pension contributions are included in severance packages it is hard to predict what they will be when you have to pay them."

Thursday September 25, 2003