Revealed: FTs' £92m spend on exit packages

Norfolk and Suffolk Foundation Trust paid out £8.8m in redundancy payments and other exit packages in 2013-14 - eight times its previous year’s severance bill but only slightly more than the £8.2m it paid out in 2011-12.

Its severance bill last year included a £307,500 payoff to a director who had been made redundant - the highest payment to an individual in the country last year and one of three payments made by the trust that exceeded £200,000.

The trust, which has an annual turnover of £216m, last year paid off 213 staff, 84 of whom had been made compulsorily redundant.

The trust’s finance director, Andrew Hopkins, said its large severance bills in 2011-12 and 2013-14 were the result of a merger and subsequent “major service redesign” that aimed to cut costs by 20 per cent. The trust was created from the merger of two mental health service providers in January 2012.

Across the country 3,034 people received payoffs last year. Of these 1,420 were awarded a total of £50.2m as a result of compulsory redundancy. Exit packages of more than £200,000 were agreed in 17 cases, 11 of which were for compulsory redundancies.

Our analysis also showed that mental health trusts awarded a disproportionately high share of the total. Of the £92m, £52m of payments were made by the 39 mental health foundation trusts.

They also accounted for the largest share of the £50.2m cost of compulsory redundancy payments - £31.8m of that total.

The analysis also identifies which trusts made special severance agreements that require Treasury approval because they fell outside contractual conditions.

Treasury guidance warns that it “cannot approve special severance payments that reward, or will be seen to reward, failure, dishonesty or inappropriate behaviour”.

HSJ analysis shows the Treasury approved payments to 49 individuals, totalling £1.13m in 2013-14.

The largest single payment approved was made by Central and North West London Foundation Trust to a non-clinical member of staff following a mediated settlement to an employment tribunal.

Leeds and Yorkshire Partnership Foundation Trust made payments that were approved by the Treasury to 13 individuals, totalling £47,000.

Applications for Treasury approval must state the likely chances of success at an employment tribunal and the “lessons learned” from each case.

Data from the annual accounts shows that just £1.34m was paid out to 57 employees last year in “exit payments following employment tribunals or court orders”.

HSJ’s analysis only covers foundation trusts.

It does not include payments made by the 93 non-foundation trusts, regulatory bodies, commissioners or the Department of Health.