The NAO published a report yesterday, which finds that HMT has approved some severance payments to individuals despite the fact that their inappropriate behaviour has breached the Civil Service Code.
It says that the Treasury ignored its own guidance when it approved some severance terms.
However, it did so following legal advice, which said that paying out the money would “probably be cheaper and quicker”, as the individual “would be likely to win an award in an employment tribunal”, according to the report.
A Government spokesman said: “Severance payments should not be a reward for poor performance. To provide clarity about when and how they should be used, the Government are preparing new guidance on their use for departments. We will set out details on this in due course.”