Council under fire after spending more than £800,000 on non-disclosure agreements

Nicholas Thomas, local democracy reporter

A council in south Wales has been accused of treating money like “confetti” after figures showed it spent more than £800,000 on staff non-disclosure agreements (NDAs) last year.

Caerphilly County Borough signed as many NDAs with staff leaving its employment in 2024/25 as the other four councils in Gwent combined.

The Local Democracy Reporting Service (LDRS) has reported previously on Caerphilly’s comparatively high use of NDAs, which over the past five years has cost more than £2.7 million.

Critics have questioned the motives behind the use of NDAs, suggesting they could be used to “cover up” issues or “stifle” whistleblowers.

‘Common practice’

Caerphilly Council challenged those claims and said the use of NDAs is “common practice” between employers and employees.

Figures seen by the LDRS show the council signed 41 NDAs for a total cost of around £784,000 in 2023/24.

It signed fewer agreements last year, but a total of 32 NDAs signed added up to more than £832,000.

Other Freedom of Information Act disclosures seen by the LDRS show that over the past five years Caerphilly has signed 150 NDAs with departing employees – while elsewhere in the Gwent region, Newport signed 62, Blaenau Gwent signed 40, Torfaen signed 18 and Monmouthshire signed 17.

‘Absolutely wrong’

Cllr Nigel Dix, who leads Caerphilly Council’s independent group, called the use of NDAs “absolutely wrong” and said they should be “banned in the public sector”.

“Somebody leaves their employment and they are gagged, basically,” he said. “It smacks of a cover-up and that is unacceptable.”

Cllr Dix also said he was concerned about a lack of democratic oversight, and accused the council of “throwing money around like it’s confetti”.

Concerns were also raised by the council’s Plaid Cymru group leader, Cllr Lindsay Whittle, who said the council should “explain in detail” its use of NDAs.

“The widespread use of the so-called gagging orders worries me,” he said. “What type of information is so confidential that former staff have to be gagged from speaking about them?

“Are these NDAs being used as a way of covering up matters within the workings of the council which may be in the public interest?”

A Caerphilly Council spokesman said: “These types of settlements are not ‘gagging orders’, they are agreements that are common practice and are used by many employers to facilitate a mutual termination between an employer and employee.”

On the comparative figures, the spokesman said “Caerphilly is one of the largest councils in Wales, therefore you would expect these figures to be higher than other smaller local authorities”.

However, population comparisons show Caerphilly’s use of NDAs is higher than other authorities.

Newport

The most recent Welsh figures show Newport’s population is more than 90% of Caerphilly County Borough’s, yet Caerphilly Council’s use of NDAs in the past five years is more than double that of Newport’s.

“As front-line services have been cut back, paying out such sums to ex-staff shows a complete lack of priorities and principle, and stifles any attempts by staff who want to ‘whistle-blow,’” said one Caerphilly resident and taxpayer. “There’s a widespread belief that people are being gagged not to spill the beans on some of the council’s gaffes.”

The council spokesman, however, said NDAs “are only used when a robust business case has been completed to demonstrate their requirement and are, by their nature, designed to minimise the financial impact on the council”.

He added: “We will continue to carefully monitor the use of such agreements going forward.”