National Audit Office Press Releases
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Confidentiality clauses and special severance payments

There is a lack of transparency, consistency and accountability in the use of compromise agreements in the public sector and little is being done to change this situation, an investigation by the National Audit Office has found.

Public sector workers are sometimes offered a financial payment in return for terminating their employment contract and agreeing to keep the facts surrounding the payment confidential. The contract is often terminated through the use of a compromise agreement and the associated payment is referred to as a special severance payment.

The spending watchdog highlights the lack of central or coordinated controls over the use of compromise agreements. The NAO was not able to gauge accurately the prevalence of such agreements or the associated severance payments. This was down to decentralized decision-making, limited recording and the inclusion of confidentiality clauses which mean that they are not openly discussed. No individual body has shown leadership to address these issues; the Treasury believes that there is no need for central collection of this data.

Full report: Confidentiality clauses and special severance payments

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