A top Treasury mandarin in charge of finding efficiency savings across Whitehall has walked off with a £600,000 payoff, it emerged last night.

John Oughton, the former head of the Office of Government Commerce, managed to negotiate a £612,000 package when he left the Treasury last April after deciding not to renew a three-year contract. The payment is part of a £432 million redundancy pot shared by 7,718 Whitehall officials who left their posts in the past three years. The average payout was about £60,000, after a drive to make £20 billion in efficiency savings.

Mr Oughton, now 55, who has been replaced by someone on a higher salary, was given £68,500 for six months’ notice and an extra six years in pension entitlements because he had left before 60, the Civil Service retirement age. A career civil servant, he was appointed in 2004 to succeed Sir Peter Gershon who started the efficiency programe.

Mr Oughton’s successor, Nigel Smith, has been recruited from the private sector at a salary of £180,000 a year. Mr Smith, 52, was previously the president of the Invensys Rail Group.

A spokesman for the Treasury insisted that Mr Smith was brought in because of his private sector expertise and the need to transform the procurement process across Whitehall by reskilling and retraining staff.

The payments across Whitehall, which included another £500,000 to an unnamed Treasury official, were obtained by Lord Oakeshott of Seagrove Bay, the Liberal Democrat spokesman for the Treasury in a series of parliamentary questions.

Lord Oakeshott said: “The Government has thrown half a billion pounds in taxpayers’ cash to pay them not to work. Two treasury bigwigs really hit the jackpot, splitting over a million pounds between them. Did 67 senior managers at the Treasury really deserve golden goodbyes averaging over £220,000 each, on top of their generous pensions?”

He said that the Ministry of Defence and the Home Office had failed to provide figures for redundancy numbers or payments. The Home Office told The Times that it was unable to release the figures because it cost too much to get the information.

“The Home Office and MoD are totally incompetent for failing to give answers, when other big departments can give us these vital figures. No wonder the Home Office loses track of who to deport if it can’t even count its own redundancies,” he said.

“The MoD doesn’t seem to have a clue what 19,000 nonretiring leavers have cost the taxpayer.”

The Treasury spokesman said that the £430 million redundancy payments had to be seen in the context of the £20 billion efficiency savings that had now been made across Whitehall. The spokesman claimed that 66,000 posts had already been lost through redundancies and natural wastage and the efficiency programme to find £20 billion by 2008 was on target. However, the programme was criticised strongly in a recent report from the National Audit Office (NAO) which claimed that up to half the savings could not be verified. Figures from the Office for National Statistics also appear to show that Whitehall has only shed about 39,000 over the relevant period.

“Workforce reductions are contributing to £20 billion resource savings which we have been able to redirect to front line services as part of the Government’s wider efficiency programme,” said the Treasury spokesman. “The programme has already delivered significant improvements in the way public services are delivered.”

How it all adds up
28 Redundancies in the Treasury from 2004 to 2007 at a cost of £4.2m
300+ Redundancies in the Department of Health at a cost of £42m
5,000 Redundancies in the Department for Work and Pensions at a cost of £165m
786 Redundancies at the Department for Environment, Food and Rural Affairs at a cost of £60.5m

Source: Parliamentary questions/Liberal Democrats

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