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*STOP PRESS*

3rd April 2016

BBC Radio 5 Live Investigates are covering compromise agreements today at 11AM.  Link to details here:

Radio 5 Live Investigates – Settlement Agreements and Gagging Clauses

2nd April 2013 – The Daily Telegraph publishes an article based on this research

Hi, if you’re a journalist or writer and seeking to use the information gathered here in an article, please be courteous and credit Paul Cardin, Wirral Freedom of Information Campaigner.  Many thanks!

Compromise Agreements (later known as Settlement Agreements before being quickly re-branded Non-disclosure Agreements) are legal documents, regulated by statute, and represent ‘full and final settlements’, entered into by both employer and employee. These contracts are very often used in dispute circumstances, when organisations feel there’s a pressing need to dispense with ‘problem people’, whilst ‘managing’ their own, sometimes embattled reputations.  The ‘beauty’ of these, as far as public sector employers are concerned is, when used in conjunction with “gagging clauses”, they are a quick and cheap means of:

• disposing of staff
• concealing the employer’s own often questionable conduct
• avoiding the punitive costs and reputational risks attached to tribunals
• drawing public attention away from malpractice, impropriety, scandal, immoral conduct, abuse and potentially worse e.g. links to serious organised crime.

They also very often don’t receive the kind of scrutiny from elected councillors that would be expected within democratic organisations, ostensibly set up to serve the public in an open and transparent manner.  Unelected senior officers are usually entrusted with addressing and resolving these issues beyond public view and behind closed doors.

In other words, they’re a kind of ‘democratic deficit’ or ‘Get Out of Jail Free Card’.  More here.

In local government and the NHS, compromise agreements and the gagging clauses that accompany them are quickly becoming ‘the tool of choice‘ for hard-pressed reputation managers.  The above Daily Telegraph article highlights the exponential rise in their use over the 6-year period in question.

The following Freedom of Information survey was conducted in 2011 – and covers the years 2005 through to 2010.  There are no figures for subsequent years.

Figures were sought for compromise agreements drawn up in dispute circumstances, and the first part of the FoI request was set out as follows:

Please supply Annual totals for the following:

As far as records go back, the annual figures for the total
of current employees / ex-employees (including teaching staff) of the Council who have signed compromise agreements directly related to the resolving of dispute(s) / grievance(s) / internal and external investigation(s) / whistleblowing incident(s).

Importantly, compromise agreements drawn up in dispute circumstances are the most likely ones to contain “gagging clauses”.  It’s likely these are fairly prolific, however I can’t confirm their presence without seeing the actual text of the agreements themselves (which is sensitive personal data, protected by S.40 of the FOI Act).

Occasionally it is possible to gain more information.

See this excerpt from “By Mutual Agreement”, an Audit Commission document dealing specifically with the subject of severance payments for senior public servants within final settlements.

“Within local government, there is a new requirement for
authorities to publish in their statements of accounts the
individual financial details of any severance payments to all
senior officers earning over £50,000. Those earning over £150,000 are to be identified by name, with all others by post title. These provisions form part of a wider requirement to publish all aspects of remuneration of senior officers, such as salaries and bonuses, and come into effect fully on 1 April 2010.”

These requests had to be carefully worded, to ensure that they didn’t all fall foul of the ‘costs exemption’ – which requires that the amount of dedicated officer time doesn’t go above 18.5 hours.  I later made modifications to rule out ACAS COT3 agreements (a similar type of agreement) and those drawn up for equal pay claims or redundancy situations, etc.

Click on your own local council’s name, or any other that takes your fancy, to follow the link to the WhatDoTheyKnow website.  Here you’ll find the details of the chosen council’s response.  I have much more information relating to response times; totals broken down by year; whether the answer arrived within the 20 working days permitted, and some CA figures going back to 2000.

All these and more are available upon request.

The following councils either went to internal review, overturning the initial refusal, or opened up, deciding to release the information anyway:

The following local authorities relied on various exemptions within the Act to withhold the information.  Most common was the Costs Exemption, where it was claimed that finding and supplying the information would take more than 18 hours of officer time – the equivalent of £450 in costs.

These were taken all the way to appeal at the Information Commissioner’s Office, but with mixed results:

We don’t know how many compromise agreements were drawn up in dispute circumstances at the councils who successfully withheld this information.  And with ‘difficult’ respondents, it may take some more probing before we can get this information released into the public domain – where it belongs.

It’s not surprising that many of the councils named in this final section are currently making repeat appearances in Private Eye’s “Rotten Boroughs” page, or are well-known as disappointing performers:

e.g. Barnet, South Tyneside, Wirral, North East Lincolnshire, Camden

According to Wirral Council’s publicity machine, they hadn’t been counting compromise agreements – so I’m puzzled at where the figure of 12 came from…

UPDATE   17th April 2013

Wirral have just answered the following FoI request which was placed well over 6 months ago – once again they’re in breach of the Act:

https://www.whatdotheyknow.com/request/total_annual_figures_for_comprom_347#incoming-379710

Since the Council took a calculated decision not to record or report the existence of these sensitive documents, WHO KNOWS how they arrived at these figures?  The same goes for the totals quoted for years 2005 to 2010.  They look extremely low, given this organisation has engulfed itself in the depths of scandal for well over a decade.  The total is now updated to 24 compromise agreements over an eight year period.   Due to compounded failure, we have to view this total with extreme suspicion.

Martin Morton explains his compromise agreement and unlawful gag here

More from:

The Brighton Argus ……and an article from June 2011

The Bradford Telegraph and Argus

UPDATE   23rd April 2013

In response to the Council’s answer to the above FoI request, and in light of their self-declared failure to monitor and report compromise agreements as they were issued, I lodged the following, asking how they could have arrived at accurate figures:

https://www.whatdotheyknow.com/request/with_compromise_agreements_not_b#outgoing-269319

My request was branded “vexatious”.  They implied I was accusing them of lying.  In reality, it’s their competence I’m questioning – I’ve provided evidence for this.

This is the second time in recent weeks that Wirral Council have used the “vexatious request” option to withhold the information.  I”ve asked for an internal review and will be taking this to the ICO if required.

Finally, here are two simple charts indicating annual totals since 2005.  What’s striking is the exponential growth in Local Authorities’ use of compromise agreements / settlement agreements / non-disclosure agreements over the period under question and now up to the present day (February 2020).  A surefire indicator that all is not well.

Brighton & Hove City Council came out top of the survey, with 123 compromise agreements in dispute circumstances over 6 years.

The average number per council was just over 14.

The ‘droop’ at the end is not ‘a change of heart’ – it’s figures working through internally, but not arriving in time to be reported and displayed in time for when the requests were placed in January 2011.

We would expect the trend to continue upwards and the true figure to be above 1,220 for 2010.  Projecting forward, 2011 would be above 1,450, 2012 around 1,650, and 2013 around 1,850.

In line with the above, the total number of agreements with gagging clauses between 2001 and 2013 is:

9,509

In the NHS, the average severance payout for gagged officials was £29,000.  A very conservative estimate for Local Authority payouts would be £15,000.

This would equate to 9,509 x £15,000 or …….

£142 million

I also made enquiries of The Law Society, one of the vested interests desperate to continue making easy, ready money out of this ongoing “cover up of a multitude of sins”

…but predictably, this fell upon stony ground.

UPDATE   14th January 2014

Answers are in for 21 of the 22 Welsh local authorities.  1,347 compromise agreements.  Total squandered = £32 million +

http://www.walesonline.co.uk/news/wales-news/thousands-gagging-orders-struck-welsh-6504084

It’s interesting that this equates to an average payout per agreement of £23,756.  If the English agreements are similar, this would equate to 9,509 x £23,756

or a total of…

£226 million

2020 Update

Projecting forward to 2020, the figure potentially spent on compromise agreements within English Councils is now as follows:

If that’s difficult to read, the total spent on compromise / settlement / NDA agreements at 345 English councils will reach £716 million this year.

This is one hell of a gravy train, that’s also indulged in by members of the Law Society, i.e. lawyers who are paid £300 per agreement, unions, who win pay-offs for their members and clear up disputes and of course, council senior officers who get to burnish their reputations at our expense.

Thanks are due to Tony Blair, who ushered all this in in the late 1990s