Blackpool Council’s £1m payouts to ‘avoid costly staff tribunals’

Bickerstaffe House which is now home to Blackpool Council, which has had to contend with more government budget cuts
Bickerstaffe House which is now home to Blackpool Council, which has had to contend with more government budget cuts

Blackpool Council has paid out almost £1m to settle disputes with staff in the past five years, it was revealed today.

The so-called compromise agreements often come with gagging orders forcing staff to keep quiet about the reasons for the fall out.

Blackpool tops the big spender league table in Lancashire.

It said goodbye to 62 employees over the five years to April 2015. Council bosses handed over nearly £1m paying out £910,201.

It coincides with year-on-year budget cuts since 2011/12 totalling £118m.

This year £25m has been slashed with frontline services affected including grass cutting and green waste collection, while 250 jobs will be lost.

Tory opposition leader on the council Coun Tony Williams warned it was wrong to use public money to silence people.

He said: “Government guidance has made it clear that confidentiality clauses should only be used in “extreme circumstances” – and not to hide the value or nature of any severance payments.

“There can be no excuse for silencing people who’ve got a legitimate concern

“If an employee is being told they can’t talk about something and bought off, that’s not an acceptable use of these settlement agreements.

“Confidentiality clauses should not be used to stop, stifle or control individuals from speaking out about concerns about their employer.”

But Council leader Coun Simon Blackburn said the agreements were used to avoid costly employment tribunals, not to silence whistle blowers.

He said: “The Council uses compromise agreements on rare occasions where we have a dispute with an employee that cannot be resolved.

“Compromise agreements avoid what can be lengthy and expensive employment tribunals which could seriously endanger the council’s finances.

“To put the number of compromise agreements into some kind of context, Blackpool Council hires around 5,000 employees and as such we see many people leave every year for a variety of reasons.

“Each and every case is considered very carefully by a senior panel, taking into account the costs involved and agreement is only given where this is a clear reason to do so.

“A standard condition of any compromise agreement is a confidentially clause which has to be agreed to by both parties.

“As a public body the vast majority of our business is public information and can be easily accessed and requested, however there are always going to be matters relating to individuals whether that is residents, businesses or employees that need to remain confidential.

“The council does not enter into compromise agreements with employees on issues relating to safeguarding concerns or where there is a live whistle blowing complaint.”

However, Coun Williams said lack of transparency could lead to corruption.

He added: “There is no excuse for outrageous pay-offs at a time when all parts of the public sector should be finding ways to save taxpayers’ money.

“If staff are silenced by gagging orders, it increases the risk that we will wake up in five or 10 years to find that corruption has taken root in local government, and at that point it will be much harder to eradicate.”

Lancashire County Council came in second place with 33 former employees picking up £766,274. October 2013 saw the high-profile departure of chief executive Phil Halsall from the county council following a disciplinary probe.

His £190,000 pa employment was “terminated by mutual consent” and a council spokesman confirmed he had not received any compromise payments.

Fylde Council approved five redundancy related compromise agreements at a cost of £79,756.

Wyre signed up to five but declined to provide exact numbers or figures. The details were disclosed following Freedom Of Information requests. In 2013 the National Audit Office (NAO) criticised a lack of transparency, consistency and accountability in the use of compromise agreements in the public sector.

Following an investigation, it said an imbalance of power between employer and employee could leave the system open to abuse, they meant poor performance or working practices were hidden and lessons remained unlearned and agreements were a significant cost on the public purse.

The NAO said it was important that compromise agreements do not leave staff feeling gagged or reward the failure of either an employee or organisation.

It noted such agreements were widely and often legitimately used.

‘What is a compromise agreement?’

A compromise agreement is a legal document used to bring a job role to an end. Workers who sign one agree not to pursue a claim against their former employer at a tribunal. Many, though not all, including a ‘gagging’ clause where the worker agrees not to reveal details of their employment or exit. They are used in both the public and private sectors and can be used to resolve disputes more quickly - and with less expense - than going through a tribunal.

The cost of compromise

Compromise agreements April 2010 to April 2015

• Lancashire County Council signed 33 at a cost of £766,274

• Blackpool Council signed 62 at a cost of £910,201

• Preston Council signed 17 at a cost of £169,699

• Fylde Council signed five at a cost of £79,756

• Ribble Valley Council signed 11 at a cost of £24,294

• South Ribble signed one at a cost of £5,000

• Wyre signed five but refused to provide more details

TOTAL: £1.44M