MPs slam pay-off gagging clauses

The Public Accounts Committee (PAC) highlighted evidence that so-called “gagging clauses” have been used to cover up serious failures in organisations such as the NHS.

But inadequate monitoring by the Government means it is impossible to say how many have been deployed – or whether they were appropriate.

Investigations by the National Audit Office (NAO) last year found the Treasury had signed off more than 1,000 special severance payments linked to compromise agreements for departing staff since March 2010.

More than £28.4m was paid out – but the true figure will be much more as this does not include local government, the police, BBC, or private contractors.

Cases raised during the cross-party committee’s inquiry include £225,000 paid to former Morecambe Bay NHS Trust chief executive Tony Halsall, who stood down amid concerns over baby deaths at his hospital.

MPs also referred to the gagging of Lincolnshire hospital chief Gary Walker after he raised concerns about standards, and the £120,000 offered to buy the silence of an NHS whistle-blower in the case of the death of Baby P.

PAC chair Margaret Hodge said: “We are deeply concerned about the use of compromise agreements and special severance payments to terminate employment in the public sector. It is clear that confidentiality clauses may have been used in compromise agreements to cover up failure, and this is simply outrageous. We heard evidence of shocking examples of using taxpayers’ money to ‘pay-off’ individuals who have flagged up concerns about patient or child safety.

“It is vital that people feel free to speak out to help prevent terrible tragedies or even deaths, and protecting the reputation of an organisation, such as the NHS, at the expense of public safety is unacceptable.”