Money paid out for public sector settlements and NDAs in Scotland doubles in a year

Scottish public sector bodies spending on settlement payments to former staff almost doubled in the past year, figures published by the Scottish Government show.

This included a payout worth almost £200,000 to an employee within the further education sector, the details of which will remain secret due to it being one of 19 settlements subject to non-disclosure or confidentiality agreements.

In total, £2.6 million was paid out by the Scottish Exchequer across just 79 people who received the payments – an average of £32,772 per settlement. Of this, more than £2.2m in ‘non-contractual’ costs, in effect settlements paid to resolve the employment dispute, forms the substantive part of these payments.

Around a third of the total settlement payments – worth £796,660 – are subject to confidentiality clauses, restricting the ability for public scrutiny and transparency.

Four settlements breached the £95,000 cap for such payouts, worth £187,475, £110,766, £97,000 and £96,000 individually. Public bodies are required to submit a full business case outlining why these payouts are needed, and are later approved by ministers.

Two of these are subject to non-disclosure or confidentiality agreements, with the latter two comprising contractually required payouts by the NHS.

Of the £2.6m, just £375,000 of contractual payments, which includes notice payments and pay in lieu of time owed, were also paid out. This is a significant increase from £1.37m in non-contractual payouts last year, with an extra £250,000 in contractual payments.

In total, 20 settlement agreements across 17 public sector bodies were paid out, worth just over £580,000, with 13 – more than half – subject to confidentiality clauses.

The Scottish Exchequer has had to pay out a significant amount in settlement payments this year.

An additional 26 cases, across nine higher and further education organisations in Scotland, cost the government £1.25m, with six subject to non-disclosure agreements.

A further 33 agreements were paid to employees across 14 bodies within NHS Scotland, worth more than £750,00, though none were subject to confidentiality clauses. The figures are published annually by the Government and submitted to the Scottish Parliament’s public audit committee for scrutiny.

A Government spokesperson defended the use of settlement agreements, claiming they were used “extremely rarely”. However, their use has drawn criticism across the UK as they can be employed as a way to silence criticism or claims of misconduct among politicians or civil servants.

Figures for settlement cases have hovered at around 70 annually for the past five years, but peaked at 109 in one year in 2017/18. The total number in 2021/22 of 79 represented an increase of seven cases and is the highest in the past four years.

A Government spokesperson said: “Across Scottish public bodies, settlement agreements are used extremely rarely and only in very limited circumstances. These agreements represent a tiny percentage of the overall pay bill and staff employed.

“Settlement agreements address specific employment issues in individual bodies and the number and nature of these can vary between years. Robust controls are in place to scrutinise expenditure in line with the Scottish Public Finance Manual and associated guidance.

“Publication of the Annual Report on the Use of Settlement Agreements demonstrates our commitment to openness, transparency and appropriate scrutiny of public sector operations.”

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