Foundation trusts have spent more than £5.7m on pay-offs to departing staff over the past three years, figures made public today for the first time show.

The amount paid out annually on foundation trust “special severance payments” has more than doubled over that period, from £990,000 in 2008-09 to £2.4m in 2010-11.

The payments are above contractual entitlements and are made to employees, particularly senior managers, on leaving employment.

They can be tied to compromise agreements protecting the organisation from subsequent legal claims from the employee or from negative publicity, according to NHS Employers guidance.

According to the Treasury, these payments should be “exceptional”, and they always require Treasury approval “because they are usually novel, contentious and potentially repercussive”.

But the figures released by the House of Commons public accounts committee last Friday show foundation trusts have been authorised to make hundreds of special severance payments over the past three years, ranging from less than £1,000 to nearly £200,000.

The biggest payment to an individual in the last financial year was £190,000, paid by South Staffordshire and Shropshire Healthcare Foundation Trust.

A spokeswoman for the trust said it was “not legally allowed to comment as this is a confidential issue”.

Over the three year period University College London Hospitals Foundation Trust spent the most on special severance payments – £351,000 to 14 former employees.

The severance figures were attached to an unrelated report on NHS procurement. Committee member Stephen Barclay had used the opportunity of a committee evidence session to task NHS chief executive Sir David Nicholson with getting hold of the data.

The Conservative MP said he had been unable to obtain the information any other way, despite “numerous parliamentary questions” and requests to the Department of Health, the Treasury, and foundation trust regulator Monitor.

His fellow committee member Kevin Bacon had warned that if Sir David could not provide the information, the public accounts committee might line up the accounting officers of every foundation trust in England to give evidence to the committee.

The main finding of the committee’s report on purchasing was that “fragmented” health service procurement had “produced a great deal of waste, with trusts being charged different prices for the same goods, ordering in inefficient ways and failing to control the range of products which they purchase”.

Committee chair Margaret Hodge said: “The Department of Health needs to be clear how, when [after the NHS reforms] trusts are independent of its control, it will achieve the essential savings it should enjoy from the joint, bulk buying of medical supplies and other consumables in NHS hospitals.”

Biggest single FT pay-offs

Foundation TrustPay-off (2010-11)
South Staffordshire and Shropshire Healthcare FT£190,000
Central Manchester University Hospitals FT£150,000
Calderdale and Huddersfield FT£125,000
Berkshire Healthcare FT£95,000
South Staffordshire and Shropshire Healthcare FT£90,000