A report by the TaxPayers Alliance reveals how much local authorities have been spending on settlement agreements.
Local Authority Settlement Agreements
The research conducted by the TaxPayers Alliance found the following:-
- Local authorities entered into 6,980 settlement agreements with their employees between 2016-19. The total amount paid out under these settlement agreements was £98,059,105,00 with an average payout of £14,048.59
- Stoke-on-Trent City Council made the highest payout of £195,463.00. The same Council also entered into the most number of settlement agreements with its employees, with a total of 371 settlement agreements
- Basingstoke and Deane Borough Council had the highest average payout, with its settlement agreements averaging £79,628.00.
- Of the 408 local authorities contacted, just 45 had entered into no settlement agreements with their employees at all during the period 2016-19.
- The South East was the region with the highest number of settlement agreements with 381, whilst London had the highest level in terms of the total value of its payouts at £5,819,520.00
The data for the survey was obtained by the TayPayers Alliance following a freedom of information request.
Freedom Of Information Requests
In recent times, the amount being paid out by local authorities in relation to settlement agreements has come under growing scrutiny. Hence, there have been a large number of freedom of information requests. For instance, a freedom of information request highlighted that Walsall Council had paid out £434,571.16 in relation to 30 settlement agreements between 2015 – 2018, with the largest pay out being £58,603.00, and with an average pay out across the 30 settlement agreements of £14,485.71.
Moreover, a freedom of information request revealed that Leicester City Council had paid out £531,716.00 in relation to 36 settlement agreements between 2016 and 2018, with the largest pay out being £62,000.00, and with an average pay out across the 36 settlement agreements of £14,769.00.
Furthermore, yet another freedom of information request found that between 2013 – 2017, Devon County Council paid out £1,965,370 on 145 separate settlement agreements
As we also highlighted in a recent article, after making a freedom of information request in relation to Thanet Council settlement agreements, former councillor, Ian Driver, submitted a formal complaint in which he stated: “I wish to make an objection about the management of non-disclosure agreements (NDAs) agreed with departing council staff during the 2019-20 financial year. According to a Freedom of Information request I submitted to the council the organisation spent £268,000 in 2019-20 on securing NDAs. This request was made in early March 2020. I suspect that the actual figure may be higher. I have reason to believe that one of those NDAs was agreed between the Council and [a] former employee [who] is reported to have made very serious allegations of bullying.”
The Debate Over Public Sector Exit Packages
There has been concern expressed by some for many years about the scale of exit packages within the public sector, whether as part of a settlement agreement or without. For example, during 2017-18, over £200 million was paid out on exit packages in the public sector, including with respect to redundancies, both voluntary and compulsory. It was also recently revealed that Dorset Council had paid out £986,354.00 to one departing employee, and that the same Council had paid out over £100,000.00 each to 40 employees who had left. Moreover, MP, Andrew Bridgen, went as far as to state: "Some of these payments look more like lottery wins than compensation for losing a job."
Nevertheless, with the implementation of The Restriction of Public Sector Exit Payments Regulations 2020 with effect from the 4th November 2020, exit payments within the public sector are now limited to £95,000.00.
However, the British Medical Association (BMA), along with UNISON, UNITE, the GMB, the Association of Local Authority Chief Executives (ALACE), and Lawyers in Local Government (LLG), have been granted permission to pursue a judicial review of the public sector exit payment cap regulations. They argue that the depiction of public sector exit payments in some quarters is unfair and misplaced.
In pursuing judicial review, the BMA state: “[The regulations] ignore…existing contractual obligations, including agreed redundancy rights or where the employer otherwise accepts that the worker is owed the sums as agreed compensation for the employer’s unlawful acts….The Government’s intention to seek to override potential payments due to exiting employees is unlawful as the Government cannot interfere with and override rights agreed in workers’ employment contracts....The BMA also argues the proposed regulations are contrary to human rights legislation as they put public sector employees at a significant disadvantage in seeking to enforce their rights to peaceful enjoyment of their property, as compared to private sector workers.”
