by Harry Fone, grassroots campaign manager
The TPA has a long history of calling out wasteful spending by councils, particularly when it comes to staff pay and overly generous exit packages. Through our Town Hall Rich List series, we’ve highlighted some of the grotesque remuneration paid to senior staff at local authorities.
The latest data from the Ministry of Housing, Communities and Local Government suggests there may be a glimmer of hope for taxpayers when it comes to keeping local authority staffing costs under control.
According to the figures, the total value of all exit packages in England (payments made to staff leaving their jobs at local authorities) was £252.4 million in 2020-21. A significant decrease compared to 2014-15, when it was £517.1 million. On this point alone, it is clear that TPA campaigning is paying off and councils are beginning to keep a tighter grip on the purse strings.
Unfortunately, it’s not all good news - especially when we focus on senior employee exit packages. While total exit payments have decreased from a high of £35.3 million in 2015-16 (after a low of £20.9 million in 2014-15) to £23.6 million in 2020-21, the average cost of an exit package has soared from £68,183 in 2014-15 to £101,438 in 2020-21.
As MHCLG also points out in its analysis of the data, “the proportion of exit payments that included an ex gratia [golden handshake] or other payment has also increased during this period, from 29% in 2014-15 to 59% in 2020-21.”
The total cost of exit packages may be declining, but senior staff are cashing in more and more. In 2014-15, only two senior employees in English councils received ex gratia payments in excess of £100,000. But as of 2020-21, that had risen sharply to nine.
That’s why we’ve long campaigned for a cap of £95,000 to be imposed on exit payments. Despite being promised in the 2015 Tory manifesto, we finally saw a breakthrough in November last year when the government implemented the cap. But it didn’t last long. Just a few months later, Whitehall mandarins and union bosses managed to get it overturned. Once again, we await news from treasury minister, Steve Barclay MP, regarding plans to reintroduce a cap.
Taxpayers are sick to the teeth of seeing their hard-earned money being squandered on these gilt-edged exit payments, but the abandonment of the long-awaited cap has left them in limbo. Ministers and mandarins are dragging their feet, and we are footing the bill. With the latest figures clearly showing that exit payments are on the rise, the campaign to put the lid back on the pot has never been so important. Please sign our petition and urge the government to reintroduce the cap.