Source · Select Committees · Public Accounts Committee
Recommendation 19
19
Accepted
Persistent issues with unapproved special severance payments continue across Departmental Group entities.
Recommendation
Exit packages are payments made in relation to redundancy and other departure costs for employees. Special severance payments are a subset of exit packages, relating to any non–contractual payments to employees.31 We have repeatedly raised issues with the Department or its organisations making inappropriate or unapproved payments. In June 2022, the previous Committee found that three Clinical Commissioning Groups (CCGs) had approved and paid special severance payments without following the required authorisation process. One of these payments resulted in the C&AG qualifying his regularity audit opinion on the NHS England 2020–21 Annual Report and Accounts. The previous Committee warned in 2022 that planned large–scale NHS restructuring increased the risk of future payoffs and further non–compliance with the rules. It recommended that the Department should set out how it would monitor and control the approval of all redundancy payments made by entities within the Departmental Group.32 The Department agreed with our recommendation, and told us in its response to our report that detailed written guidance relating to exit payment processes and approvals had been circulated to CCGs and the (then) proposed ICBs, and that separate arrangements were in place for NHS Trusts and Foundation Trusts.33
Government Response Summary
The government accepts the recommendation, stating NHS England is redrafting guidance on exit packages and approval mechanisms, which will be communicated and impact exits from 2025-26.
Government Response
Accepted
HM Government
Accepted
6.1 The government agrees with the Committee’s recommendation Target implementation date: end Summer 2025 6.2 NHS England is currently redrafting the guidance around exit packages and the associated approval mechanisms. This guidance will include instruction on all types of exit packages including voluntary severance, Mutually Agreed Resignation schemes (MARS), compulsory redundancies, and special severance cases. This guidance will be communicated via the regional workforce teams as well as via the NHS England external website. This should have an impact on exits agreed from 2025-26. 6.3 Where instances arise with compliance with the approval mechanism for exit packages, NHSE conducts a lesson-learnt exercise and reiterates the approval rules via several avenues. For example, NHSE directly liaises with the organisations involved to ensure the rules are understood, and through financial control events where NHSE promotes good practice and reminds delegates of the governance arrangements for certain types of transactions. So far for 2024-2025 NHSE has seen fewer instances of non-compliance, but the final assurance process on this is not fully complete as of May 2025. 6.4 Regarding the future arrangements for exit packages, the oversight mechanism will depend on where the legal powers reside after the integration of NHSE into the future Department of Health and Social Care. NHSE will ensure it is picked up in the transition process.