In a new revelation, the British government has paid £457,000 in compensation to Tom Scholar, who served as the finance ministry’s top civil servant until his ousting when Liz Truss became Prime Minister last year. The compensation details were disclosed in the government’s latest accounts on Thursday.
Scholar departed from his role on September 8, shortly after Liz Truss appointed Kwasi Kwarteng as the finance minister following a Conservative Party leadership campaign that had criticized the finance ministry for sluggish economic growth. At the time of his departure, Scholar stated that Kwarteng had opted for new leadership at the Treasury.
Kwarteng then presented a “mini budget” to parliament on September 23, featuring tax cuts and energy subsidies to stimulate economic growth. However, the move led to a decline in government bond prices, necessitating intervention from the Bank of England, and ultimately resulted in both Kwarteng and Truss losing their positions.
According to the finance ministry accounts released on Thursday, Scholar, who had an annual salary of just under £200,000, received over £550,000 in remuneration last year. Out of this amount, £335,000 was a severance payment for loss of office, while an additional £122,000 represented compensation in lieu of notice and holiday entitlement.
In contrast, Truss and Kwarteng were granted severance payments of £18,660 and £16,876 respectively, as per separate legislation that grants ministers a three-month salary payment upon resigning.
Notably, former Prime Minister Boris Johnson also received a similar severance payment, as did Rishi Sunak, Truss’ successor when he quit as finance minister in July 2022. However, Sunak returned his payment, according to the Treasury.
Large exit payouts to senior civil servants have sparked controversy in the past, and Scholar’s compensation is notably higher than those granted to other senior officials in recent years. For instance, when former permanent secretary Jonathan Slater left the Department for Education in 2021, he received a £277,780 payout.
A Treasury spokesperson clarified that Scholar’s payment was a contractual amount based on the Civil Service Compensation Scheme, which considers the length of service and includes pension payments. Scholar left his position as permanent secretary on 8th September, two weeks before Kwarteng delivered the financial statement known as the mini-budget.
