Katrina Percy has left her GP advisory role at the Southern Health NHS Foundation Trust following concerns from the public and patients

An NHS watchdog has revealed it was powerless to stop the £190,000 payoff handed to the disgraced boss who presided over one of the worst NHS trusts in the country.

Katrina Percy was chief executive of troubled Southern Health before being shunted sideways to a specially created job on the same lucrative salary.

But she quit this consultancy role with the trust after a public outcry over her failings and NHS bosses admitted they had to give her such a generous payoff in case she sued for more.

NHS Improvements, the regulator which oversaw the trust, said its hands were tied over the payout as there were 'no legal grounds upon which to dismiss her'.

As chief executive, Miss Percy was accused of refusing to investigate 1,000 unexplained deaths of vulnerable mental health patients because they were not deemed serious.

These included Connor Sparrowhawk, 18, who drowned needlessly in a bath in 2013 after an epileptic fit.

Miss Percy, 43, had been chief executive of Southern Health NHS Foundation Trust since April 2011 but resigned in August after a spate of damning reports.

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Ms Percy, 42, resigned last month as chief executive after saying her job had become untenable. But she was given a new alternative role within the organisation

She then walked straight into a consultancy post created for her by trust bosses, keeping her £240,000 pay package.

Southern Health said yesterday she would be leaving this role too after objections from ‘patients, the public and families’.

In return for agreeing to resign, she will receive a settlement of £190,000, which is worth a year of her basic salary.

Miss Percy has also amassed a taxpayer-funded pension pot worth almost £500,000 and will be able to draw an income of £40,000 a year when she reaches 65.

Yesterday the body in charge of health trusts, NHS Improvement, issued an unprecedented statement trying to explain the payoff.

It said it had received ‘strong legal advice’ that if it did not offer her this deal, she would probably sue for far more.

This would have resulted in a ‘much greater cost to the public purse’, a spokesman added.

NHS Improvement also said the reason she had been offered the £240,000 consultancy post after resigning as chief executive was also in case she sued because ‘there were no legal grounds upon which to dismiss her’.

But the settlement has been widely condemned as a ‘reward for failure’. Dr Sara Ryan, Connor’s mother, said: ‘It’s utterly disgraceful that Katrina Percy should receive any kind of settlement.

Drowned: Miss Percy first came under scrutiny following the death of 18-year-old Connor Sparrowhawk (pictured), who drowned in the bath at a trust facility in 2013

‘It’s good that she’s gone, but the payoff is obscene. How can the NHS afford such payoffs for people who have failed?’

Former health minister Norman Lamb said: ‘This is hugely disrespectful to Southern Health patients and their loved ones, who I campaigned with over the trust’s scandalous failure to properly investigate unexpected deaths.

‘It was insulting that Ms Percy was offered this very lucrative advisory position at the trust when this first came to light, and for her now to be offered such a generous payout is a completely unjustifiable reward for failure.’

Tory MP Mims Davies, whose Eastleigh constituency is covered by Southern Health, said: ‘We need an urgent debate on why this is allowed to happen.

‘I understand this utterly over-generous compensation is adhering to NHS guidelines and I understand Miss Percy has not been found to be incompetent, but many people think she has failed patients and staff at Southern and will see this as just a reward for failure.’

Deborah Coles, of Inquest, a charity that supports bereaved families, said: ‘The resignation of Katrina Percy should mark the end of Southern Health’s denial of responsibility for systemic failings.’

Concerns about Southern Health first arose in October 2015, when a jury at Connor’s inquest ruled his death had been preventable. He drowned in a bath at a centre run by the trust in Oxford, which has since been closed down.

Then in December an independent investigation revealed the trust had failed to investigate up to 1,259 unexplained deaths over a four-year period.

Miss Percy promised to make urgent improvements, but a Care Quality Commission report in April found little had changed.

Further concerns were raised in July when the trust admitted paying millions to companies run by Miss Percy’s cronies.