Council among the top spenders on settlement agreements with former staff

Freedom of Information requests submitted by the TaxPayers’ Alliance revealed that the county council ranked 11th in the country for the number of settlements signed and 13th for the total spend, with £1,366,177.65 handed out between 2016/17 and 2018/19.

Settlement agreements are legally binding agreements between employer and employee, which set out the terms of the termination of employment.

Darwin Friend, researcher at the TaxPayers’ Alliance, said: “Though settlement agreements are sometimes necessary, councils need to remember that it’s ratepayers who foot the bill. 

“These settlements have been signed at the same time that the vast majority of local authorities have increased council tax, meaning some have spent huge sums on hush money while hiking up local rates. 

“Given that almost 50 councils have managed to spend nothing on these deals, it should be perfectly possible for those paying the most to do better and keep down the costs of individual golden goodbyes.”

The county council has handed cash for a total of 128 settlements in the last three financial years.

A spokesman for the authority said: “Cumbria County Council uses settlement agreements when there is a need to ensure that the terms of the exit between the employer and employee remain confidential.

“Settlement agreements are used in many organisations where the employer and employee have mutually agreed an end to the contract of employment, for reasons including redundancy.

“The annual figures include the ‘total amount’ the employee is contractually entitled to when leaving the council, which means these payments include all contractual payments such as notice pay, outstanding holiday pay and any payment due as a result of voluntary redundancy, all of which are in line with the council’s policy.

“We are committed to transparency and value for money for the taxpayer and as such the use of settlement agreements is routinely reviewed as part of our policy review process.”

Allerdale council forked out just over a quarter of a million pounds between 13 former members of staff.

Commenting on the spend, a spokesman said: “Settlement agreements between the council and the individuals concerned remain confidential.”
Copeland was the Cumbrian district with the least spend, handing over almost £66,000, split between two former employees.

A spokesman said: “The figures confirm that Copeland council uses settlement agreements very infrequently. However, on the small number of occasions they have been used, they have been the optimum solution for both the council and the individual concerned.”