Thursday 16 January 2014
Thousands of 'gagging orders' struck by Welsh councils at a cost of more than £32m
Series of Freedom of Information requests reveal 80% of costs incurred came from Cardiff council alone, with total agreements running to nearly 1,350
More than a thousand “gagging order” agreements have been struck by Welsh councils in severance deals costing more than £32m, the Western Mail can reveal today.
In a series of requests made to Wales’ 22 local authorities, of which all but one replied, it was revealed that 1,347 so-called compromise or settlement agreements contained clauses which bar former employees from challenging their exits in employment tribunals or in court, or speaking out against their employers in the media. A total of 981 were agreed by Wales’ largest authority, Cardiff council, alone.
The total – which covers a maximum 10-year period – sees 80% of the costs of agreements struck by Welsh councils containing compromise agreements made up by Cardiff council, which as of last year had paid out more than £26m over five years – though much of that sum was accrued during the tenure of the Liberal Democrat-Plaid Cymru administration before Labour came to power in 2012.
That total amounts to more than four times the total paid out by all the other councils in Wales, which itself totals another £6.5m.
Caerphilly council, which employs nearly 10,000 staff, paid out more than £1m in 77 such agreements over 10 years, while Powys paid out £2.6m in 69 agreements covering a nine-year period. Rhondda Cynon Taf was the only council not to provide information.
Denbighshire council spent £443,188 on 17 agreements over five years, Newport shelled out £370,934 on 32 settlement agreements over a decade and Merthyr Tydfil agreed 15 such agreements over three years, at a cost of £355,652.
It follows on from an investigation carried out last year, which revealed tens of thousands of employees in England had agreed to such clauses – and led to allegations employees were being silenced in redundancy rounds.
The FOI responses, which illustrate the cost of the agreements as a whole and do not detail costs of clauses specifically, also revealed more than a third involved employees who worked with children or vulnerable people.
Lee Canning, coordinator for the Taxpayers’ Alliance in Wales, said: “Local authorities are there to serve local communities, not to gag former staff members restricting transparency.
“Measures such as so-called compromise agreements demonstrate the blatant disregard these local authorities have for local taxpayers.”
Janet Finch-Saunders, the Welsh Conservatives’ Shadow Local Government Minister, said: “At a time when local authorities across Wales are having to tighten their belts, hard-pressed taxpayers will be astounded to see tens of millions of pounds being frittered away by local authorities on gagging deals with former employees.
“These figures show an average pay-off of over £24,000 to over a thousand individuals in exchange, presumably, for their silence on supposedly confidential and perhaps even, embarrassing information.
“In times of austerity, councils should be cutting out wasteful spending and focus on delivering essential public services more efficiently to avoid unnecessary hikes in household bills.
“Labour-run Cardiff Council and other local authorities with multi-million pound confidentiality agreement bills should take a cold hard look at their employment practices and consider how they can be revised to deliver value for money for Welsh taxpayers.”
A Cardiff council spokeswoman said while the council’s discretionary redundancy payments scheme is more generous than that of the statutory redundancy scheme, it is less generous than other organisations and said the use of settlement agreements protected the council from “potentially costly” employment tribunal proceedings.
She said: “Settlement agreements are used where there is a mutual agreement to bring the employment relationship to an end usually by way of an agreed compensation package, including voluntary severance.
“Cardiff has always used this method, other than for redundancies in schools, and it applies irrespective of the grade of the person exiting the organisation. The use of settlement agreements protects the council from potentially costly employment tribunal proceedings which may be brought by an employee (i.e. unfair dismissal).
“In view of the financial position of the council over the last four years which has required services to be restructured and realigned to deliver efficiency/budgetary savings, there has been an annual reduction in headcount which has mostly been achieved by voluntary measures, hence the numbers of settlement agreements entered in to.”
A spokesperson for Powys County Council said: “The council has been through several restructures during this period, which has resulted in a number of compromise agreements.
Makes You Wonder What They Have To Hide.
Posted by Kevin Edwards at 08:50:00