Pay-offs: colleges to tell

February 10, 1995

Six further education colleges will have to explain "potentially unusual payments" worth a total of Pounds 300,000 following an inquiry by the National Audit Office into severance payments.

The inquiry was set up after controversy over Huddersfield University's dealings with departing vice chancellor Ken Durrands. Its report Severance Payments to Senior Staff in the Publicly Funded Education Sector, drafted and approved inside one week, covers both further and higher education and grant maintained schools.

The six colleges are currently explaining their actions to the Further Education Funding Council, which says: "The onus will be on the colleges to demonstrate that the amount paid does not constitute a misuse of public funds. It is possible that some or all of the colleges will be able to show this".

If they cannot the FEFC will recover the money, in one case Pounds 175,000.

In higher education the NAO asked the three national funding councils to survey severance payments in their institutions over the 1992/95 period. While Scottish figures had not been fully validated the English and Welsh councils found a total of 93 agreements with senior staff, defined as those earning more than Pounds 50,000 a year, in the years 1992/93 to 1994/95.

None occasioned the concern currently felt in the FE sector. The 86 English payments totalled just over Pounds 6 million - an average of Pounds 70,000 - and varied from Pounds 2,000 to Pounds 326,000.

They consisted mostly of cash (Pounds 2.1 million) and enhanced pensions (Pounds 3.6 million). Twelve settlements worth Pounds 800,000, including the Pounds 326,000 payment, were funded from private sources. The seven Welsh payments averaging Pounds 92,000, ranged from Pounds 18,000 to Pounds 261,000, and were also largely in the form of cash and pensions.

Nine of the English cash payments exceeded one year's salary - in three cases over two years. The House of Commons Public Accounts Committee, which will quiz Higher Education Funding Council for England chief executive Graeme Davies about the report on February 20, is expected to home in on confidentiality clauses in eight agreements.

Robert Sheldon, chair of PAC, condemned "gagging clauses" in his evidence last week to the Nolan committee on standards in public life.

One of the English agreements related to sensitive commercial information, but the rest also promised secrecy over severance settlements. Among the clauses dropped from the initial Huddersfield severance agreement was one requiring Mr Durrands to maintain four years silence on matters including "the circumstances of his dismissal".

The flashpoint for the Huddersfield row is identified as the removal of staff and student representatives from the governing body.

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