Councils spent £3.2m on confidentiality deals with staff

Nicholas Thomas, local democracy reporter

Five Welsh councils have spent more than £3.2 million on settling non-disclosure agreements (NDAs) with staff who leave their employment.

NDAs are legal documents in which parties agree to keep certain information confidential and not share it with others.

Figures obtained via Freedom of Information Act requests show the five local authorities in the Gwent region have settled 227 NDAs with departing employees since 2019.

Caerphilly

By far the biggest user of NDAs is Caerphilly County Borough Council, responsible for signing 116 such agreements in that time – more than the other four Gwent councils combined.

Those NDAs cost the council £1.6m, at an average of more than £14,000 per payout.

The figures for 2019/20 to 2022/23, shared with the Local Democracy Reporting Service (LDRS), also showed:

Blaenau Gwent County Borough Council signed 31 NDAs, costing more than £12,000 on average, at a total cost of £393,000.

Monmouthshire County Council said it had agreed on fewer than 15 NDAs with departing staff, paying out more than £71,000 in total.

In Newport, the city council signed 53 NDAs, costing an average of £17,400 and a total spend of £922,000.

Torfaen Council agreed 15 NDAs with departing staff, paying out more than £17,000 at a total cost of £258,000.

The LDRS contacted Caerphilly Council to find out why it used NDAs with departing staff, and why its use of such agreements was much higher than its Gwent neighbours.

Common practice

A spokesman for Caerphilly Council said: “These types of settlement agreements are common practice and are used by many employers to facilitate a mutual termination between an employer and employee.”

He said it was “important to note” NDAs were “only used when a robust business case has been completed to demonstrate their requirement”.

By nature, NDAs were “designed to minimise the financial impact on the council”.

He added that Caerphilly Council would “continue to carefully monitor the use of such agreements going forward”.

A spokeswoman for Newport City Council said NDAs are “only used by the council as a mechanism for protecting the interests of both parties where an agreed settlement has been reached”.