The boss of the shared services unit jointly run by Northamptonshire County Council left his job in March this year with a £66,000 payout on top of his £152,000 annual salary.
Managing director of Local Government Shared Services (LGSS) John Kane took early retirement at the end of March after five years at the helm.
Payments documented in the council’s recently published draft accounts for 2017/18 show that he was given a £30,000 loss of office payment and a £33,000 payment in lieu of notice.
Mr Kane, who has been replaced by Sarah Homer, received a total sum of £239,000 during the 2017/18 financial year.
He also received a £22,000 pension contribution payment for the year.
LGSS was created by NCC and Cambridgeshire County Council in 2010 and looks after a large number of services for NCC including HR, legal services, temporary employment, IT services and revenue and benefits collection.
In 2016 Milton Keynes Council became the third member and the combined organisation employs 1,600 staff and manages a combined delegated budget of £83m.
LGSS was heavily criticised by government inspector Max Caller in his best value report which recommended the county authority be abolished.
A spokesman for LGSS said: “The former managing director for LGSS retired in March at an earlier point than was planned.
“The partner councils – Cambridgeshire County Council, Northamptonshire County Council and Milton Keynes Council – were planning a review of LGSS and agreed an earlier timescale for this and subsequently the retirement was taken earlier.
“The payments were in recognition of this.”
In his March report Mr Caller said: “There are a number of areas where the relationship with LGSS at best confuses accountability and at worst prevents it.”
The report said: “The inspection team feel there would be benefit in reviewing the relationship between NCC and LGSS to ensure there was clearer accountability and the council had strategic capacity close to its decision makers.
“This is particularly pertinent, as it appears that LGSS is no longer generating surpluses which can be applied to reduce the overall costs to the constituent councils.”
The payments to Mr Kane come at a time when the county council has had to introduce emergency spending controls and has almost exhausted all of its reserves to make ends meet.
It is now planning to sell off historic County Hall in Northampton as well as many other assets including a number of libraries across the county.
In a statement announcing Mr Kane’s retirement on the LGSS website on February 18 this year NCC’s former interim chief executive Damon Lawrenson said: “I would like to personally thank John on behalf of LGSS stakeholders, customers and staff for his hard work, dedication and leadership of LGSS.
“In that time, LGSS has more than doubled in size and has delivered economies-of-scale for its three owning authorities and its customers.
“LGSS has consistently exceeded all of its savings and efficiency objectives, throughout the past five years.”
Last month it was revealed that the failing council paid 23 senior officers more than £100,000 in 2016/17.
The authority has not given staff a pay rise in three years and has made cuts to sick pay.
Lib Dem county councillor Dennis Meredith said the payments needed to be questioned by full council.
He said: “We need to know why these payments were made and who authorised them.
“How do staff react when they hear about these payments given to senior officers?
“Morale of staff is at an all-time low and many have not received a pay rise for several years.”
When LGSS was launched in 2010 the county authority stated the ‘partnership was formed in response to the challenges faced by local authorities, namely, public sector funding pressures, impact of the recession, rising expectations and growing demand, and seeks to reduce the cost of business services through the consolidation of resources, process redesign and exploitation of technology.’