A public spending watchdog has authorised two “golden parachute” payments of more than £250,000 each just months before the government plans to introduce a cap on public sector rewards.
The National Audit Office has disclosed the payments in its annual report, weeks after George Osborne pledged to end the controversial practice of allowing public bodies to make six-figure payoffs.
Senior MPs said the level of the payments was inappropriate for a body that scrutinises public spending.
Margaret Hodge, the outgoing public accounts committee chair, said: “I am really taken aback and I am sure the new chair of the PAC will want to ask appropriate questions.”
Bernard Jenkin, the chair of the public administration and constitutional affairs committee, which scrutinises the civil service, said: “It reflects badly on the values of the civil service if organisations are going to try to exploit any delay for the cap.”
John Mann, the Labour MP who has campaigned for increased scrutiny of payoffs, said: “It is hugely inappropriate, particularly for that body. If it was another part of government doing it, I would expect the NAO to come down on them very strongly.”
Martin Sinclair and Gabrielle Cohen, who have both been assistant auditors general, will receive between £260,000 and £265,000 each, according to the report.
Sinclair, who received a salary of £145,000 to £149,000, will receive his money before September. He is a member of the Chartered Institute of Public Finance and Accountancy (CIPFA) council and is chair of CIPFA’s remuneration committee.
Cohen was paid up to £144,999 until she left her post in April. During the 2014-15 year, she was responsible for leading the NAO’s stakeholder relations, governance, corporate policy and relations with parliament, according to its annual report.
Under proposals announced in the Queen’s speech, and which will be introduced via an enterprise bill in October, “golden parachutes” will be capped at £95,000. Senior civil servants will also be obliged to return a portion of their payoff if they take another job in the public sector within the following 12 months.
Both Cohen and Sinclair have held the roles of executive leaders. The NAO advertised for such a role in May, according to an online posting.
The NAO said in a statement that the level of payments could not be altered and argued that it was replacing two posts with just one.
“Restructuring of the NAO’s leadership team as part of our ongoing programme of reorganisation to cut costs required the departure of two members of the team,” it said.
“Under the provisions of the Civil Service Compensation Scheme, they were paid compensation payments the size of which were dictated by the rules of the scheme taking into account their salaries and length of service. The NAO has no discretion to alter the size of payments made under the scheme.”
The decision for Cohen to leave was made late last year, while Sinclair’s departure was decided in January. The NAO said it was unaware of the plans to cap the payments when the decisions were made.
Parliament voted for the new chair of the public accounts committee on Wednesday, but a result had not been announced at the time of publication. The candidates were the Labour MPs Helen Goodman, David Hanson, Meg Hillier and Gisela Stuart.
