The equality watchdog has admitted that the rehiring blunder, which saw seven senior staff paid £324,000 after they took generous early severance packages, would not have happened in the private sector.
The Equalities and Human Rights Commission (EHRC) yesterday blamed its precursor agencies’ voluntary retirement rules, claiming that it had “no choice” about allowing talented staff to leave the body, only to then re-employ them as consultants, at a total cost of nearly £1m.
Facing a grilling from MPs on the public accounts select committee, chairman Trevor Phillips said: “We had no choice about the way this could be done. We had no option but to offer these [redundancies] on a voluntary basis.
“The view was, we needed fewer staff and that would put us in a favourable parliament expenditure position. But the cost on that is that we could not foresee who went.”
He added: “We could not create a situation in which we could tell people to stay.”
But after further questions from MPs, interim chief executive Neil Kinghan admitted: “They [the private sector] would have preceded by maintaining people they had with expertise whom they thought necessary.”
In a hard-hitting report by the National Audit Office, the commission was criticised for poor planning during the setting up of the EHRC, which left it 140 staff short when it was due to start operations. The body had only 10 of 25 directors in place.
A total of 185 staff out of 600 employed by the former agencies were granted voluntary redundancy or early retirement, costing £11m.
Phillips said: “When we opened our doors in October 2007 we were desperately short of senior managers. The chief executive [then Nicola Brewer] and I discussed how we would fill the skills gaps and one of the things she wanted to do was to bring back some of the senior officers who had worked on the senior management team and the transition team.”
He added that with hindsight, the commission should have “probably” delayed its start date to give it time to address staff shortage problems, but ultimately this would have been at greater cost to the taxpayer.
Phillips denied that the seven staff were brought back under a “sweetheart understanding”, as one of the MPs had put it. “I don’t do nudges and winks, that is not my style,” he said.
Kinghan said: “We accept [the seven] should have been recruited in a more open way and on a competitive basis. I would accept it was a mistake at the time.”
The seven staff brought back – five without a break in contracts – included a director of communications and several corporate lawyers, at a cost of £323,708. Between them they received a severance package of £629,276.
During the hearing it emerged that Kinghan, who took up the interim role in May this year, after Brewer left, earns £1,000 a day. The highest amount paid to the managers who were re-hired was £822 per day – giving them considerably more than when they were employed as staff.
The EHRC was formed by merging the Equal Opportunities Commission, Disability Rights Commission and Commission for Racial Equality, which Phillips chaired.