Golden goodbyes and the two-tier state

Millions in public money are being spent on ‘golden goodbyes’ for senior officials. But the rules are clear for everyone else, why do they change at the top?

There is a simple question at the heart of the latest revelations about ‘golden goodbyes’ in Scotland’s public sector. Why is anyone getting them? If an employee is made redundant, there is already a process. Statutory redundancy exists for a reason. Contracts set out notice periods, entitlements and compensation. If someone leaves without fault, they receive what they are due. If they are dismissed for incompetence or misconduct, they receive nothing beyond what the law requires. That is how the system works for almost everyone. 

So why, at the upper levels of the public sector, does a different system apply?

In the last year alone, Scotland’s public bodies agreed on ninety severance deals costing more than £3.2 million, with a significant portion paid over and above contractual obligations. Across local authorities, the numbers are far higher: more than £60 million has been spent on exit packages for senior council staff since 2022. 

These are not marginal figures. They are not anomalies. They represent a pattern. And that pattern points to something deeper than administrative convenience. It points to a two-tier state. 

The formal justification for settlement agreements is familiar. They are said to provide an efficient way to resolve disputes, avoid costly tribunals, and bring difficult situations to a close without prolonged disruption. In some cases, that is undoubtedly true. Employment disputes can be expensive, time-consuming and damaging for all involved. There will always be situations where a negotiated exit is preferable to a drawn-out legal process. 

But this justification only takes us so far. 

Because the scale and structure of these payments suggest something else is happening. These are not simply pragmatic settlements. They are, in many cases, discretionary payments made to senior figures leaving their roles under clear circumstances. And, crucially, they often come with confidentiality clauses. 

Nearly a third of the recent deals included gagging provisions. While these cannot legally prevent whistleblowing, their function is obvious. They limit what can be said publicly. They reduce scrutiny. They ensure that the circumstances of departure remain opaque. 

This raises a second question, more troubling than the first. If these agreements are simply about efficiency, why the need for silence?

What we are seeing is not an isolated quirk of Scottish administration. It is part of a broader shift in how public institutions operate. Over the past few decades, the boundary between public service and corporate management has blurred. Senior public officials are increasingly treated less like civil servants and more like executives. With that shift has come a set of practices imported from the private sector: performance bonuses, incentive structures, and negotiated exits. 

This was not always the case. Civil servants did not historically receive bonuses in the modern sense. Nor were large severance packages a routine feature of public administration. The expectation was different: stability, accountability, and a clear distinction between public duty and private reward. 

That distinction has eroded. 

Once a system introduces bonuses and performance incentives at the top, it changes behaviour. Boards begin to operate with a different logic. Relationships become more transactional. The language of ‘packages’ and ‘negotiations’ replaces that of responsibility and accountability. And when things go wrong, the response shifts accordingly. 

Instead of disciplinary processes, there are settlements. Instead of a public explanation, there is a managed departure. Instead of consequences, there is compensation. It is, in effect, a system of carrots for elites and sticks for everyone else. The core issue here is not simply the money, although that matters, particularly in a context of strained public finances and underfunded services. 

The issue is accountability. 

In any functioning public system, there must be clarity about why decisions are made and how responsibilities are exercised. When senior figures leave their posts, the public has a legitimate interest in understanding why. 

“It is, in effect, a system of carrots for elites and sticks for everyone else.”

Was there a failure of performance? A breakdown in relationships? Misconduct? Structural reorganisation? Settlement agreements, particularly those accompanied by confidentiality clauses, obscure these questions. They create a situation in which individuals disappear from public roles with little or no explanation, often accompanied by substantial payments. 

This is not a trivial concern. Public institutions derive their legitimacy not only from their formal powers but from the public confidence in how they are run. When that confidence is undermined, the effects are cumulative. Each opaque departure, each unexplained payout, contributes to a broader perception that the rules are different at the top.

Trust in public institutions is not built through rhetoric. It is built through consistent, visible fairness. When ordinary workers see senior officials leaving with six-figure packages while services are cut and budgets squeezed, the conclusion is difficult to avoid. The system appears to reward failure at the top while demanding restraint everywhere else.

This perception is corrosive. It feeds into a wider sense that public institutions are not operating in the interests of the public but in the interests of those who run them. It reinforces the idea that accountability is selective, applied rigorously downward but softly, it at all, upward. 

And once that perception takes hold, it is hard to reverse.

The Scottish Government maintains that settlement agreements are subject to scrutiny and must represent value for money. It also emphasises that such cases represent a tiny fraction of the overall workforce. Both points are true, but neither addresses the underlying issue. This is not about frequency. It is about principle. 

Even a small number of high-profile, poorly explained payouts can have a disproportionate impact on public confidence. Trust is not eroded only by scale. It is eroded by visible inconsistency. 

There is a further complication within a Scottish context. Local authorities operate with a degree of independence. Decisions about staffing and severance are, formally, matters for councils themselves. The Scottish Government, while responsible for overall funding, does not directly control these arrangements. This creates a familiar dynamic. Responsibility is diffused. Accountability becomes harder to locate. 

But from the perspective of the public, these distinctions matter less than might be assumed. Whether the payment is made by a council, a quango, or a government department, it is still public money. And the expectation remains the same: that it is used transparently, responsibly, and in a way that reflects the values of public service. 

At its core, the issue is straightforward. There should not be a separate set of rules for senior figures in the public sector. If redundancy is necessary, it should follow established procedures. If dismissal is warranted, it should be carried out openly and fairly. If disputes arise, they should be resolved in ways that prioritise transparency as well as efficiency. 

Exceptional payments should be exactly that: exceptional, clearly justified, and fully explained. 

Confidentiality clauses, when used, should be narrowly defined and subject to rigorous scrutiny. Their purpose should be to protect genuinely sensitive information, not to shield institutions from embarrassment. These are not radical demands. They are basic expectations in any system that claims to operate in the public interest.

Ultimately, the question of ‘golden goodbyes’ is not just about severance payments. It is about a kind of state we are building. A system in which rules are applied consistently, where accountability is visible, and where public service is understood as a responsibility rather than an opportunity for reward. 

Or a system in which senior figures operate under a different set of expectations, insulated from the consequences that apply to everyone else. The danger is not simply that money is misspent, though that matters. It is that over time, the perception of a two-tier system becomes entrenched. And once that perception takes hold, trust in public institutions begins to erode.

That is far harder to repair than any budget line. Which brings us back to the original question. Why is anyone getting a golden goodbye? Until there is a clear and convincing answer, the suspicion will remain that the system is not operating as it should. And that suspicion, more than any single payout, is what does the real damage.