Golden Goodbyes

Euan McColm wrote this hard hitting piece in Scotland on Sunday at the weekend and he's absolutely right - the whole business of these big 'golden goodbye' payments stinks to high heaven.

In this case a former civil servant walked away with a huge sum of cash - even though she had another job within a short space of time.

So what was the £300,000 supposed to be 'compensating' as the former CEO seems not to have lost out financially speaking in moving on from Historic Scotland?  

Now these kind of payments are not unusual in the public public sector and. of course, they are always reserved for the most senior and highest paid staff - many millions of pounds of public money have been squandered by Scotland's councils, NHS boards and other public bodies such as the BBC in recent years - £18 million is just the tip of the iceberg.

People routinely take early retirement and then walk into other paid employment - but it seems to me that allowing people to 'retire' and then re-enter the workforce rather defeats the point an early retirement scheme.

I would change the rules by capping these big buy off payments - and suspending pension payments if the former employee continues to work and does not actually retire.   

Euan McColm: How can we afford golden goodbyes?

Former Chief Exec of Historic Scotland, Ruth Parsons, alongside Mike Russell. Picture: Donald MacLeod

by Euan McColm

REDUNDANCY can be the most devastating life experience, especially for the middle-aged. There are the practical considerations: how am I going to pay the rent or mortgage? Are there any jobs I can actually do? Do I need to retrain?

And then there is the emotional impact: the feeling of powerlessness; fear about the future; frustration at the prospect of starting from scratch.

A common response is to wear a brave face and insist to friends and family that this sudden, unwanted career change is a great opportunity. Perhaps you know someone who’s chosen this coping ­strategy. You’ll know the pathos can be unbearable.

If you’re lucky, your employer will have its own redundancy scheme and you might get enough to tide you over. But if you’re entitled only to statutory redundancy, you can expect half a week’s pay for every year you were under 22, a week’s money for every year you were aged 22-41, and one-and-a-half week’s cash for those years in which you were over 41.

Actually, you might not get that. Statutory redundancy payments are capped at £430 a week and at 20 years’ service. The maximum anyone receives under this scheme, regardless of time served or salary earned, is £12,900. A decent chunk of cash, yes, but hardly the strongest of safety nets.

Ruth Parsons, a career civil servant, was appointed chief executive of Historic Scotland in 2009. What followed was a turbulent 30-month period within the heritage agency.

A survey of Historic Scotland employees in October 2011 uncovered several claims by staff that they had been harassed at work. The wellbeing study of 1,100 staff found 53 reported bullying in some form, five alleged that they were often victimised, and two felt they were continually bullied.

Despite the findings of the survey, there were no formal complaints lodged by staff, and Parsons denied there was discontent within the organisation, and strongly rejected allegations of bullying levelled against her.

In June 2012, Parsons arranged a deal to leave Historic Scotland, and went on to become deputy director of the International Public Policy Institute at Strathclyde University, a position she still holds along with the executive directorship of CyArk, a charity committed to creating an online 3-D library of world heritage sites.

On leaving Historic Scotland, Parsons enjoyed considerably more than the statutory entitlement for departing employees. We now know that Parsons was compensated “for loss of office” to the tune of almost £300,000, or around three times her annual salary. Forget one week’s pay for every year worked. Having worked for Historic Scotland for just two-and-a-half years, Parsons received almost two grand for every week she had been in post.

This payment was authorised – alongside a raft of other civil service redundancy packages totalling £18 million last year – by the Scottish Government. Many of these were mundane enough cases. The total figure covers the departures of 461 staff. But there are some eyebrow-raisers in the mix. Two senior officials left their jobs with packages amounting to more than quarter of a million pounds, while 29 in total received six-figure sums.

Scottish Conservative leader Ruth Davidson raised Parsons’ case with Alex Salmond during First Minister’s Questions on Thursday, when she correctly identified the pay-off as a huge amount and demanded to know why ministers had not taken a personal interest in the arrangement since this was a high-profile case.

Since Scottish taxpayers were footing the bill for this “golden goodbye”, it was incumbent upon the First Minister to tell us who was responsible for signing it off. It was hard to believe, said Davidson, that such a lucrative package could have been handed over without a minister’s say-so..

It’s true the Scottish Government’s guidelines suggest ministerial clearance might have been sought in this case, though the unhelpfully vague wording of the advice to ministers – that this should be done “as and when appropriate” – lets Salmond and colleagues off the hook. Salmond was clear that it would not have been appropriate for ministers to intervene in Parsons’ case. We must take him at his word. But Davidson’s questions in the Holyrood debating chamber were not about changing anything, about getting the money back. Hers was an attempt to make the First Minister appear blasé about public finances at a time when cuts have hit the services upon which we depend.

It’s not, however, Salmond’s fault that Parsons received such a thwacking great pay-off – along with pension contributions that will give her a further £100,000 lump sum and £35,000-a-year upon retirement – but rather it’s the fault of the terms and conditions of civil service employees.

We might be interested (after all, who doesn’t like a gossip?) in the details of how and why it was decided that Parsons should depart from Historic Scotland but we have no right to. Confidentiality in these matters must be available to every employee, even if we don’t much like the look of the deal as struck.

But we are entitled to ask questions about whether civil service contracts should include vastly inflated pension schemes, funded by taxpayers, and lump sums which, in some cases, would comfortably buy a house.

Why should it be that private sector workers have no more protection than that offered by the statutory redundancy scheme while the civil servants who drafted that legislation have so much more, including the common practice of turning redundancy into early retirement, ensuring fat pensions are paid out immediately?

Davidson affected to want more detail about the Ruth Parsons case in order to embarrass Salmond. More useful to the rest of us would be a serious examination by politicians of whether it’s sustainable – or fair – for senior civil servants to enjoy such colossal financial perks at all.