By Steven Swinford From UK Daily Telegraph

Almost 5,000 council workers and civil servants have been gagged at taxpayers’ expense at a cost of up to £400,000 each.

Last month the Government banned gagging orders for NHS employees after it emerged that more than £18 million had been spent on silencing 600 staff.

However, the use of similar orders is widespread for departing employees across both local authorities and Whitehall, leading to accusations that ministers are being “hypocritical”.

In Whitehall, more than 200 civil servants and officials have signed compromise agreements in the past two years, at a total cost of £14 million. Officials said it was “standard practice” for them to include confidentiality clauses.

One of the biggest payoffs was made to Philippa Williamson, a former chief executive of the Serious Fraud Office, who left on voluntary redundancy.

She received £462,000 and is thought to have signed a confidentiality agreement.

Local authorities have signed 4,562 compromise agreements with former staff, according to figures released under freedom of information laws. Most of them contain confidentiality clauses.

Eric Pickles, the Local Government Secretary, said: “For too long, local government has made departing staff sign gagging orders, often with big pay-offs attached, away from the eyes of those who get left with the bill: the taxpayer.

“When leaving a job, councils and their employees need to part ways fairly. Giving out thousands in under-the-counter pay-offs to silence departing staff is not the way to achieve this.

“Councils have a responsibility to the public and transparency is at the heart of that.

“By shining a light on these activities and introducing new democratic checks and balances to stop gagging orders being abused we are helping councils improve accountability in local government.”

In Whitehall, hundreds of officials have been given “special severance payments” with Treasury approval. Officials say that most contain confidentiality clauses.

According to its most recent accounts, the Department for Business, Innovation and Skills has signed the agreements with 83 officials over the past two years, at a cost of £2.6 million.

The Treasury has signed agreements with 64 individuals at a cost of £2.5  million, although a source said only a “small number” involved confidentiality agreements.

The Department for Transport confirmed that it had signed 40 agreements in the past three years, all of which contain confidentiality clauses.

The Department of Energy and Climate Change has signed 12 agreements containing confidentiality clauses at a total cost of £1.5 million.

The Ministry of Justice has signed 15 at a cost of £250,000, while the Foreign Office has spent £5.5 million on severance agreements in total.

Richard Bacon, a Conservative MP and member of the Commons public accounts committee, said: “These agreements are outrageous, they are using taxpayers’ money to shut people up. It reveals an approach and philosophy to the way the public service is run that is rotten to the core.”

The actual total for Whitehall is likely to be far higher. There are almost 400,000 civil servants, and many government departments do not publish figures on compromise agreements.

Jon Trickett, the shadow cabinet spokesman, said: “It is rank hypocrisy, ministers are telling others to stop doing something which is rife in Whitehall.”

Freedom of Information Act requests established that 256 councils in Britain signed compromise agreements with former staff between 2005 and 2010. Employment lawyers said the agreements almost always included confidentiality clauses. The number of confidentially agreements issued by councils rose sixfold from 179 in 2005 to 1,027 in 2010. Those subject to the orders range from social services whistleblowers to former executives who left with six-figure pay-offs. Brighton & Hove city council has signed the most, with 123 agreements. Bristol city council signed 121 compromise agreements, Coventry city council 114 and Bolton 107.

A total of 95 agreements were signed at Kent council, including one for Katherine Kerswell, the council’s former managing director, who was given a £420,000 payment after less than 20 months in the job. She is now the Cabinet Office’s director of Civil Service reform

In some cases, the agreements have been used to try to silence whistleblowers. Martin Morton, a social services manager at Wirral borough council, went to his superiors in August 2006 after receiving disturbing reports that some council care services were being run by criminals. Four men with baseball bats were reported to have demanded money from one care home manager. There were also allegations that vulnerable patients had been raped and people with learning disabilities were being routinely overcharged. He subsequently signed a £45,000 compromise agreement after being ignored, isolated and bullied.

Mr Morton, however, refused to keep his silence. After going public with his allegations, the council admitted that it had overcharged 16 adults with learning disabilities more than £500,000.

An official report commissioned by the council confirmed many of Mr Morton’s concerns. One of the carers had a conviction for assault with a deadly weapon, and the rape allegations were passed to police. Mr Morton said: “These gagging orders have a chilling effect. I was terrified about speaking out, I didn’t know what the consequences would be.”

A spokesman for the council said it had apologised to Mr Morton and admitted that it handled the claims “badly”.

The widespread use of gagging orders by local authorities was uncovered using freedom of information requests by Paul Cardin, who was silenced by a council. Mr Cardin, a former lighting engineer at Cheshire West and Chester council, was barred from even making freedom of information requests under the terms of his compromise agreement.

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