“Golden handshake” report shows States are still not ensuring processes are followed

Thursday 05 May 2016

Years after the “golden handshake” scandals that saw 11 civil servants leave the States with exit payouts totalling £1.5 million, the States still have not learned lessons and put in place rules to ensure the “incidence and value of payments is justified”.

A follow-up report by the States’ independent auditor has found that there is still work to do to ensure that payouts to civil servants leaving the States are providing value for money.

The Comptroller and Auditor General, Karen McConnell, says that the States need to review contractual terms for senior staff, develop performance management systems and apply clear documentation standards where compromise agreements are being used.

A report by the previous C&AG in 2012 into the payments showed that:

-       States Chief Executive Bill Ogley left with a £546,3337 payout in 2012 after falling out with then-Treasury Minister Philip Ozouf.

-       Health and Social Services Chief Executive Mike Pollard left with a £129,000 payout in 2009 after resigning “for personal reasons”.

In all, the 2012 report showed that 11 civil servants were paid a total of £1.5 million over five years – not including a £170,000 payout to former Waterfront Enterprise Board Chief Executive Stephen Izatt in 2011.

Since then, the only “golden handshake” that has been publicly confirmed is the £169,375 that was given to former States Treasurer Laura Rowley as a “compensation payment”.

In a few weeks, the States accounts for 2015 will be published which will reveal whether any exit payments were given to departing staff last year.

In her update report published this morning, Ms McConnell wrote that while “golden handshake” payments were sometimes necessary, the States still had not acted on recommendations from 2012 to ensure that they were used properly, and to ensure that the taxpayer was getting value for money from them.

In a statement accompanying her report, she wrote: “Compromise agreements are a valid and important tool of management and can be useful when seeking to secure change.

“However payments made to departing staff, especially senior staff, understandably arouse public interest.

“Although some welcome changes have been made, such as the Code of Conduct for Ministers and changes in law to enhance the role of the Chief Executive, more needs to be done to ensure that value for money is being achieved.

“The findings of this review again identify actions that need to be taken to facilitate the shift in culture necessary to secure change.”