Harrow Council paid out more than £180,000 in staff settlements last year but insisted it represented “value for money”.

Analysis by the Taxpayers’ Alliance showed the council spent £181,610 on reaching 12 agreements with ex-employees.

This was around £60,000 more than the year before, but about £40,000 less than in 2016/17.

A spokeswoman for Harrow Council explained that settlements are calculated based on an employee’s contractual rights and any other “appropriate” compensation.

She said: “Settlement agreements are made where it is the interest of all parties that employment should come to an end. This can be for a wide range of reasons.

“We review the cost of any potential agreement taking into account whether a settlement offers better value for money over expensive legal costs.”

Harrow spent the 12th-largest amount overall in London and was the 47th-highest in the country among local authorities that provided data for 2018/19.

Stoke-on-Trent City Council spent the most on settlements last year – coughing up around £1.48 million – and had the highest individual pay out at over £195,000.

The Taxpayers’ Alliance noted the sometimes-complex nature of settlement agreements, but also highlighted the financial difficulties faced by councils that are affecting public services.

Darwin Friend, researcher at the Taxpayers’ Alliance, said: “Though settlement agreements are sometimes necessary, councils need to remember that it’s ratepayers who foot the bill.

“These settlements have been signed at the same time that the vast majority of local authorities have increased council tax, meaning some have spent huge sums on hush money while hiking up local rates.

“Given that almost 50 councils have managed to spend nothing on these deals, it should be perfectly possible for those paying the most to do better and keep down the costs of individual golden goodbyes.”

Earlier this month, Harrow Council’s cabinet approved a draft budget for next year that includes a council tax increase of 3.99 per cent and almost £4 million worth of cuts.