The amount spent on redundancy payments by foundation trusts has fallen significantly over the past three financial years, HSJ analysis reveals.

Data collected from FTs’ annual accounts shows that the total spent on redundancies fell from £80m in 2014-15 to £57m in 2016-17.

The fall could reflect the government’s scrutiny of the size of exit payments and changes to payment rules, the union Managers in Partnership said.

The national totals are disproportionately made up by small number of trusts. Of the £208m spent by FTs on redundancy payments over the three years, £55m was by just 10 trusts (see table).

Of these trusts, seven are mental health providers, two are acute providers in the North East and one is a teaching hospital trust in Yorkshire. Subscribers can download and explore the full dataset here.

Northamptonshire Healthcare FT spent £8.8m over the three years, making it the highest spending FT in the country on redundancy and other severance payments.

South Tees Hospitals FT was the second highest spender, paying out £6.8m over the same period.

Ten biggest spenders on exit payments, 2014-15 to 2016-17

Foundation trustTotal exit payments (£m)

Northamptonshire Healthcare FT


South Tees Hospitals FT


South West Yorkshire Partnership FT


South Essex Partnership University FT


Southern Health FT


County Durham and Darlington FT


South Tyneside FT


Calderdale and Huddersfield FT


5 Boroughs Partnership FT


South London and Maudsley FT


MiP chief executive Jon Restell said the decrease since 2014-15 could reflect a “much tighter approval process” from NHS Improvement and the Treasury than in previous years. Pay outs above a certain level have to be signed off by the Treasury, after being referred through NHSI.

He said the £80,000 cap on the total final salary a redundancy payment can be calculated on might also account for some of the decrease.

Only Mersey Care FT made a redundancy payment of more than £200,000 in 2016-17.

NHS Improvement was approached for comment.

Midlands FT is biggest exit spender over three years

Northamptonshire Healthcare FT, which has a turnover of £198m, spent £8.8m in redundancy and other severance payments from 2014-15 to 2016-17 – more than any other FT over the three years.

In 2014-15, it paid £6m. In 2016-17, the latest year for which data is available, its pay outs were fourth highest in England.

The trust, which employs 2,930 people, made exit payments to 64 staff in 2016-17, including one £160,000 package, and 16 staff in 2015-16.

In 2014-15, when severances came to £6m, the trust parted with 121 staff. It had spent £3.5m the previous year on redundancy payments to 142 people.

Trusts are now obliged to report staff on off-payroll arrangements earning more than £220 a day for more than six months at a time. The annual accounts show that for 2016-17, the trust had 57 employees in this category – with 13 of them in post for four or more years.

A trust spokeswoman said the redundancy costs were incurred as part of a large savings programme and restructuring.

A statement said: “To ensure we have met our cost improvement programme, we streamlined our management structures whilst protecting our clinical services, in line with the principles of Lord Carter’s review to reduce back-office functions. We have also undertaken a major organisation development programme to ensure all staff have been engaged and supported in this change and all cost improvements are reviewed by our director of nursing and medical director prior to being implemented.

“Further to these changes, we would not expect significant redundancies in the short term other than if our commissioners decommission currently provided services.”

The highest spender on redundancies in 2016-17 was South West Yorkshire Partnership FT, which was the third biggest spender over the three years.

The mental health and community services provider’s director of finance, Mark Brooks, said: “Our redundancy costs stem from the decommissioning of services and also the reshaping of teams due to reductions in income for some services. We have also incurred costs restructuring to enable us to achieve our cost saving requirements”

The decommissioning of Wakefield Health and Wellbeing and the family nurse partnership cost the trust more than £1m in redundancies in 2016-17; £255,000 was spent on payment after the stop smoking service was closed the previous year. In 2014-15, the trust attributed £411,000 to the “impact of recommissioning with lower income” and £1.3m to “restructuring to achieve CIPs”.