Civil service severance pay comes under fire

The Public Accounts Committee (PAC) has criticised the failure of departments to clearly record the use of confidentiality clauses in severance payments to public sector workers.


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By Civil Service World

04 Jul 2013

Members of the committee yesterday argued that the absence of any account of the number of these clauses and amount of severance payments – criticised in a recent NAO report – was undermining transparency and accountability.
PAC chair Margaret Hodge said “we want a system whereby the public, this committee and the NAO can know what’s happening across the piece – not because of the money, but because it’s just important that people know, for all sorts of reasons, about this.”

Giving evidence, Treasury director of general public services Sharon White agreed with Ms Hodge in principle, but said the Treasury should “work harder and closer” with departments rather than centralise the monitoring of severance payments under its own roof.

“My own personal view is that that is not a responsibility that the Treasury is best placed to do,” she said, but under questioning from the Tory MP Richard Bacon she admitted it “wouldn’t be difficult” for the Treasury to keep a list of payments.

Mr Bacon disagreed that individual departments can be trusted to clearly report on their severance payoffs and the confidentiality clauses they contain. “Given the propensity of the NHS over many years to use confidentiality and compromise agreements to hide misconduct and malpractice, do you think that we can trust the NHS…to disclose all the information, or would it better if it were collected centrally?”

Ms White said that the Treasury expects the NHS to deal with the question of whether a clause is merited, and itself only considered “whether the outlay of the special payment was less than the expectation of losing the [an employment tribunal] and the associated payment”.

Both Ms Hodge and Mr Bacon said the failings in the NHS were emblematic of problems that can occur across the civil service. Ms Hodge called on the Treasury to ensure – whether it accounted centrally or not – that payments and confidentiality clauses are accountable to the public across the civil service, and in private firms undertaking government contracts.

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