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Havering Council paid £900,000 over three years in settlements to ex-employees

Almost 50 local authorities did not spend anything on settlement agreements during the same period

Havering Council has spent more than £900,000 settling disputes with former employees in just three years.

Settlement agreements allow bosses and staff to quickly resolve disagreements, around issues like termination, in exchange for money or other benefits.  

The council spent £914,494 on 85 disagreements with former employees between 2016 and 2019, according to new research by the TaxPayers Alliance. 

“Every pound that is spent on a settlement agreement is money that is either being charged through council tax or isn’t being spent in other areas,” said Sam Packer from the TPA. 

“We’re not saying is that all settlement agreements are terrible and they should all cease but we are merely trying to draw attention to the fact that there is a big difference.” 

Havering spent the seventh most of all London Boroughs on settlement agreements. 

In contrast, almost 50 local authorities across the country did not spend anything at all during the same three-year period. 

The TPA is calling for a reduction in spending, particularly at a time when council tax is being increased across most local authorities. 

“Hopefully the public will recognise that their councils aren’t necessarily spending their money in the best way possible and hopefully public pressure will pay off,” continued Packer. 

“Our hope would be that we can get councils to spend less taxpayers’ money and, in so doing, charge less council tax.” 

A Havering Council spokesperson said: “We only use settlement agreements in exceptional circumstances, when there is an employment dispute between the Council and an employee either to agree the terms of their departure or to resolve disputes with existing employees, where their employment is not to be terminated.”

“Between 2016 and 2019 a number of cases were resolved via a settlement agreement. 

“In November 2019, the Council introduced a protocol to reduce its expenditure on settlement agreements and to cut down on the expectation that poor performance or conduct will be rewarded in a financial agreement. It also aims to reduce any perceptions that we will avoid tackling management issues.”

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