Where’s the £6m of exit package money gone?

The financial exit package data paid to employees leaving any of the Councils in Kent, including Medway, over the last three years, is wrong by more than £6m.

Each year in any Councils accounts they must publish the total value of the exit packages; and the number of employees who have received an exit package. The term ‘exit package’ is used to describe the terms under which someone agrees to leave their job.

Typically, a Council who is willing to agree an exit package with an employee will want to enter into a legally binding Settlement Agreement waiving their rights to take any future legal action against the Council.

When one looks at all Kent & Medway Council exit packages as published by them and what they the Council’s report to the Ministry of Housing, Communities and Local Government, there are remarkable differences. 

Here is just one example of those remarkable differences. Folkestone & Hythe DC have published two different versions of their exit packages for 2023/24. The higher value £640,000 only got published after the matter was brought to the Auditor’s attention.

Since 2015, the Auditor for all Kent councils, including KCC & Medway Council, has been Grant Thornton (GT). It is their responsiblity to audit the accounts, using their professional scepticism and conclude the accounts are a true and fair representation of what is stated in them. However, it’s also the responsibility of the s151 officer, who is the responsible financial officer for the Council’s money, to provide the auditor with accurate and timely information, by law, as their role is statutory.

Although the difference between the two sets of published exit package data for Folkestone & Hythe DC is £323,000, the initial sum published, £317,000, was not true and was never true. The auditor failed to notice. The auditor blidly accepted what information the Council s151 officer offered them. One truly has to wonder what else the external auditor may have been misled about. However, the external auditor is not  entirely at fault. The internal auditors fail to check the exit packages, relying on the fact the external auditor is doing the work, so they believe there is no need to replicate the work, when clearly the evidence demonstrates there is a clear need.

Below is the data as published by all Council’s in Kent & Medway, in their accounts for the last three financial years 2023/24, 2023/22 and 2022/21 and compared with the data published by the Ministry of Housing, Communities and Local Government for the same period. Or you can download it as a spreadsheet here

The KCC data alone is very worrying. In 2023/24 they declared in their accounts the total exit package value was £851,872. The Ministry data says it was £2,604,000, this is a difference of £1,752,128. In 2022/23, the total KCC exit packages value as published in their accounts was £613,250. The Ministry data says it was £2,110,000, this is a difference of £1,496,750 and in 2021/22, the total KCC exit packages value was £524,425. The Ministry data says it was £2,184,000, this is a difference of £1,659,575. As such the true value of all KCC exit packages has been unreported by £4,908,453 over the last three financial years.

This is no surprise to us at the Shepway Vox Team, given the published data by the Councils and Ministry was off by £2,377,738 in 2023/24, £2,106,179 in 2022/23 and £1,659,575 in 2021/22, which £6,143,492 in total. This final figure will probably be higher as the Ministry suppresses exit package data if five or less people receive a payment as they could be identified. And one mustn’t forget, some Council’s have yet to publish their 2023/24 accounts. 

All Councils have an elected councillor responsible for the finances. They also have an elected chair for the audit committee ; which looks at the accounts. And on the audit committee there are other elected cllrs as well. What we can say, is the external auditor, the internal auditor, the Council’s s151 officer, the elected cllr responsible for the finances and all the members who sit on the audit committees, of all 14 councils, have failed to see that more than six million pounds has disappeared from the exit packages of all Councils in Kent over the last three years.

It is not astonishing the number of people who have failed to spot the disappeance of more than £6m from Councils accounts in Kent. But we – The Shepway Vox TEAM as armchair auditors have spotted the disappearance of this money, that’s because we subscribe to the Mrs Angry definition of an armchair auditor

To be successful armchair auditor, perhaps the most important quality to have is an instinct for misinformation, and a deep seated suspicion of the way in which local authorities operate. Always assume the worst: you will almost always be right.

The Shepway Vox Team

Dissent is NOT a Crime