Westminster Council payroll overpayments total £480,000 in five years

An internal review has revealed that Westminster Council payroll overpayments totalled £480,000 over the past five years, a figure the authority attributes to what it called “a quirky accounting rule” linked to its outsourced payroll system.

The council said it has already reclaimed most of the money, but £99,000 remains outstanding from former employees. The sums came to light following a Freedom of Information request submitted by the Local Democracy Reporting Service (LDRS).

According to the council, most overpayments occur when employees leave after the monthly payroll cut-off. “Occasional overpayment is almost always due to staff leaving, changing role, or working hours mid-month,” a spokesperson said. “This is common in large organisations with monthly payroll. The vast majority of this money is recouped immediately and the council makes a considerable effort to recover any overpayment which is not returned straight away.”

Efforts to reclaim lost funds

The council explained that its outsourced payroll provider calculates any overpayment and issues an invoice and accompanying letter to the former employee. The provider follows up three times before the council itself intervenes and, if necessary, transfers the case to a debt recovery agency.

A spokesperson added that “considerable effort” is made to retrieve outstanding sums in cases where payment is not returned promptly.

Departments with the highest overpayments included housing and commercial partnerships, which accounted for £91,000, followed by children’s services with £86,000, and regeneration, economy and planning with £76,517.

Broader scrutiny

Payroll errors are not unique to Westminster. Other public bodies have faced similar issues in recent years, prompting calls for tighter financial monitoring and better digital integration between HR and payroll systems.

The government’s Local Government Transparency Code encourages councils to publish details of spending and financial efficiency as part of wider public accountability.

The council said it continues to work with its payroll provider to reduce the likelihood of future overpayments.

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[Image Credit | BBC]

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