Taxpayers foot bill for £120m public sector ‘golden handshakes’

Edinburgh City Council which presided over exit deals totalling 21.7m pounds. Picture: Scott Louden
Edinburgh City Council which presided over exit deals totalling 21.7m pounds. Picture: Scott Louden
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The cost of taxpayer-funded “golden handshakes” rose by £8 million last year to almost £120m.

Hundreds of staff at councils, the NHS and quangos enjoyed lucrative six-figure severance deals, annual accounts show.

The figures have prompted fresh opposition calls for the payouts to be reduced at a time of austerity and question marks about whether the money is being well spent.

The bulk of the payouts has been among local authorities which are being forced to axe staff in an effort to meet the impact of budget cuts.

The cost of council exit packages around the country jumped by £23m in 2015/16 to reach £97m, according to their annual accounts.

Scottish Conservative finance spokesman Murdo Fraser said: “It’s been several years since public sector organisations in Scotland embarked on what was meant to be a period of austerity.

“So people will be surprised to see the number of those getting pricey golden goodbyes continuing to rise.”
The organisations involved are likely to be bound in many case by “contractual agreement”, Mr Fraser said.

But he added; “When taxpayers’ money is concerned, we need to see more being done to reduce these types of payouts.”

Overall, there was £118.7m paid out in deals such as redundancy and early retirement as public sector bodies moved to cut costs. This was up from £110.9m the previous year.

The biggest spike was in Edinburgh City Council which presided over exit deals totalling £21.7m – up from just £2.8m the year before.

And 40 staff in the capital left with six-figure severance packages – including two people who each secured a package worth between £250-300,000, the figures show.

A council spokeswoman said last night: “The reason for the increase is due to the council’s transformation programme, which in on target to deliver £70m of recurring savings every year. The payouts made were done in the context of this and an efficient spend to save programme.”

The next highest was at Highland Council, where £18m was paid out in exit deals. Fifty of those leaving the authority received six-figure deals. Highland launched a voluntary redundancy scheme which saw 340 workers leave and the authority says this will mean a full-year saving of £10.08m.

East Dunbartonshire, which includes the affluent areas of Milngavie and Bearsden, saw 40 workers get six-figure severance packages, including two who secured deals worth more than £300,000. The council paid out almost £9m in exit deals, the figures show, with 101 staff leaving in total.

A spokesman for local government body Cosla said the higher figure for councils show the extent to which other parts of the public sector have been “protected from financial cuts”.

“This means that we have had to let staff go as budgets become tighter to free up money for frontline service provision,” he said.

“There can be no mistaking the fact that budget cuts to councils impact on both jobs and services.”

Councils’ “transformational change” programmes also mean that they have “downsized considerably and therefore lost more staff than other parts of the public sector”.

The spokesman added: “This shows that councils are managing change in a responsible, planned and thought through manner and doing their best to protect services to communities.

GOLDEN HANDSHAKES

Body 2014/15 2015/16

COUNCILS

Edinburgh £2,786,000 £21,719,000

Highland £897,662 £18,068,781

East Dunbartonshire £6,032,781 £8,999,066

Fife £4,270,000 £6,058,000

Dumfries and Galloway £2,494,664 £4,510,095

NHS

NHS Lothian £1,888,000 £1,231,000

NHS Grampian £734,000 £163,000

NHS Education Scotland £743,000 £550,000

NHS Greater Glasgow&Clyde £980,000 £468,000

NHS 24 £0 £318,000

QUANGOS

Scottish Govt £11,000,000 £6,405,000

Scottish Police Authority £11,628,000 £5,617,000

Registers of Scotland £1,653,000 £2,199,000

Scottish Water £500,000 £1,500,000

Visitscotland £1,882,000 £554,000