Crown Prosecution Service follows BBC into row over huge pay-offs for departing chiefs

By Frederika Whitehead and Mark Conrad | 17 September 2013

“You have this guy who has been out for five years, but what do you do with him”
– Source speaking on condition of confidentiality

Ministers face pressure over pay-offs for public officials as Exaro today reveals that the Crown Prosecution Service gave £1.1 million in total to two ex-employees.

The CPS awarded its former chief operating officer, Mike Kennedy, one of the bumper ‘golden goodbyes’ – worth around four times his annual salary – 18 months before he was eligible for retirement.

Exaro’s disclosure is bound to reignite the row over generous payments – funded by tax-payers – to departing public-sector chiefs.

It follows MPs’ fierce condemnation of the BBC for making a series of huge pay-offs to former senior managers – paid out of licence fees.

Meanwhile, Whitehall sources told Exaro that Eric Pickles, communities secretary, is planning a further crackdown on large pay-offs in local government.

One insider told Exaro that Kennedy left his post last November because the CPS struggled to find a role for him after he returned from a secondment to a European Union body.

But the angry insider tipped off Exaro, which last year broke the scandal of how thousands of senior civil servants were able to slash tax by working off-payroll, through personal-service companies.

Following the tip-off, we have pieced together how the CPS gave a series of generous benefits to make up Kennedy’s pay-off package, of in excess of half a million pounds.

A CPS spokesman confirmed that, in addition to Kennedy, an unidentified “senior employee” received a £623,555 pay-off in 2009, saying that such officials can be contractually entitled to up to six years’ salary if made redundant.

The spokesman said: “The CPS applied the contractual compulsory redundancy terms to which the employee was entitled, and had no discretion in the size of this payment.”

Clues about Kennedy’s golden goodbye are buried in the CPS accounts for the 2012-13 financial year, although they do not make clear the full scale of the pay-off.

The accounts show that his salary was between £145,000 and £150,000 a year. They also show that he was awarded a “compensation” payment of between £255,000 and £260,000 as part of his severance deal.

But that was only part of it. In addition, he received between £45,000 and £60,000 in lieu of notice.

Kennedy, 59, was also able to begin drawing his civil-service pension. According to the accounts, he accrued pension entitlement that included a lump-sum payment of between £165,000 and £170,000, while his annual pension is between £55,000 and £60,000.

So, analysis of the CPS accounts show that Kennedy’s pay-off package totals at least £520,000, including the first year of his annual pension, but as much as £550,000.

However, although not set out in the accounts, employment rules for civil servants mean that Kennedy was also eligible for a separate “severance” payment of up to six months’ salary, potentially adding another £75,000.

That would bring the total pay-off to between £595,000 and £625,000.

However, the CPS spokesman said: “Mr Kennedy did not receive an additional severance payment equivalent to six months’ salary.”

It said that the payments to Kennedy “were entirely in accordance with all appropriate Cabinet Office guidance and Civil Service pension rules.”

Kennedy enjoyed a long career at the CPS. He went on a five-year secondment to be president of Eurojust, the EU body that fosters judicial co-operation across the European Union.

But, the insider explained, the CPS did not know what to do with Kennedy after he returned in 2008. The source said: “You have this guy who has been out for five years, but what do you do with him?”

“At the end of his secondment, he was guaranteed the right of return to his home organisation. It is normal when you are seconded that your home organisation must take you back.”

Kennedy has told friends that he is seeking work. But, even if he finds work, he can still keep the pay-off.

As the government makes large cuts in the public-sector workforce, ministers face a growing backlash over the size of “golden goodbyes” for senior officials.

Since the BBC gave a £450,000 pay-off to George Entwistle, director general for 54 days, it has taken most heat on the issue. MPs grilled BBC chiefs again last week over several pay-offs.

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