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Councils pay out more than £220m to ex-employees in settlement agreements

Local authorities have paid out more than £220m in settlement payments over the last five years to just over 17,000 ex-employees, with many agreements including gagging orders, but the LGA says all payments were only authorised in the public interest.

An FOI request, from BBC 5 Live Investigates, revealed that 17,571 council workers have signed a settlement agreement, many of which include confidentiality clauses, between 2010 and 2015, with pay-outs worth £226.7m.

It is not clear how much of the settlement money was enhanced pay-outs for signing agreements, which can include confidentiality clauses designed to limit what former employees can say about their work.

A spokesperson for the LGA said: “These are financially difficult times for councils and as a result of their efforts to provide efficient cost-effective public services there has regrettably been a requirement to downsize their workforces.

“In this context, as good employers, councils make decisions that are based on their contractual and legal responsibilities when determining the level of severance or settlement payments made to their employees.

“In extreme circumstances payments are made beyond this level but only when the alternative would be costly or lengthy legal action.

“All payments made by local authorities are subject to legal and external scrutiny and are only authorised when they are considered to be in the public interest. 

“It is also important to note that when calculating pay outs, local authorities are one of the most efficient groups in the public sector.”

The 2016 State of Local Government Finance Survey showed councils warning about having to cut services, increase charges and draw on their reserves as a result of funding cuts.

A spokesperson for the Department for Communities and Local Government said: “There is no excuse for outrageous payoffs at a time when all parts of the public sector should be finding ways to save taxpayers' money.”

They added that confidentiality clauses should not be used to “stop, stifle or control individuals from speaking out about concerns about their employer”.

The City of Cardiff Council issued the most settlement agreements, producing 2,008 in total with pay-outs worth £5.5m.

Wirral Council signed more than 1,000 agreements in 2010-12 and Sunderland City Council used 155 in 2014-15.

A previous FOI request found that 256 councils signed compromise agreements with former staff between 2005 and 2010.


Simon Richards   04/04/2016 at 13:19

No-one appears to be saying that this is over and above severance payments to staff who are losing their jobs because of the public sector cuts. This works out at an average payment of less than £13k per person which sounds a long way short of DCLG's suggestion about "outrageous payoffs"!

Johnarudkin   04/04/2016 at 15:12

You may find my comment strange. Not because it doesn't relate to the story, but because I decided to refuse the payment offered to me (of £15,000) because I felt strongly enough that something had to be done to change things. Alas, the outcome for me was to feel unsupported by anyone from the sector (public) because of fear - fear - of repercussions. I whistleblew and was ignored. I witnessed the disappearance of £100,000 from a project that no one has ever explained; I witnessed the theft of equipment and the loss of critical data that was not reported to the authorities. Worst of all, I witnessed a member of staff promoted into a schools based role while awaiting the outcome of a 2nd GBH offence ... and all of this in an IT Department in a small unitary Council. The presiding Manager was not interested in calling Police in, and simply shrugged it all off. Of course I was made redundant. I wonder why? In my case (and in the figures I gathered) I ascertained, as did others making FOI enquiries, that the figures DID NOT INCLUDE redundancy payments. These were specifically payments made to ensure the silence of staff. Blackpool figures are presented for your interest: SUMMARY BY YEAR Gagging Orders Payments Made £ Each payment Av 2007/08 6 £ 88,084.77 £14,680.80 2008/09 9 £ 133,929.00 £14,881.00 2009/10 4 £ 52,381.68 £13,095.42 2010/11 15 £ 173,624.9 £11,575.00 2011/12 20 £ 357,531.34 £17,876.57 2012/13 18 £ 188,421.61 £10,467.87 2013/14 25 £ 329,507.70 £13,180.31 Total 97 £1,323,481.07 (£1,323,384.07) It is time those responsible for the actions and the effects on others were weeded out and removed - and that goes for those who allow it to happen as well. The Radio5live BBC Investigates could have a field day.

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