Maude defends redundancy cap

7 Jul 10
Cabinet Office minister and paymaster general Francis Maude has defended the government’s move to cap civil service redundancy pay
By Lucy Phillips

8 July 2010

Cabinet Office minister and paymaster general Francis Maude has defended the government’s move to cap civil service redundancy pay.

Maude, who is also chair of the government’s new efficiency and reform group, this week wrote to public sector unions pledging to limit compulsory redundancy payouts to 12 months pay. Unions immediately condemned the move, questioning its legality and threatening strike action.

But at a conference in London yesterday, organised by the Reform think-tank, Maude said the current system was unsustainable and ‘out of kilter’ with the private sector, with civil servants in some cases receiving almost seven times their annual salary.

‘This will not be popular with trade unions but the wider public will see this is about rebalancing fairness between civil servants and the private sector,’ he said. He added that the lowest paid civil servants would have their payouts protected.   

Maude outlined the ‘tight’ and ‘loose’ aspects of the government’s efficiency programme as it attempts to rein in public spending and plug the budget deficit. He said ‘fiscal retrenchment’ would be the ‘governing theme’ for the coalition.

The ‘tight’ elements, which include finance, civil service headcount and recruitment, ICT, leases on government property, big projects, procurement and HR, would be ‘rigorously controlled by the centre’.

But ‘loose’ responsibilities for the provision of public services should be ‘pushed away as near to the people who use them as possible’, he said. ‘The era of big government has come to an end, not just because the money has literally run out but it is also shown to have failed.’

He said government should ‘be blind to the status of the provider’, advocating joint ventures of public sector staff and outside suppliers in mutuals or co-operatives. ‘Taxpayers benefit from it being done cheaper, citizens from it being done better and staff from a more rewarding life and job,’ he said.

Local government had a ‘dependence on the centre’, and councils should move away from their ‘comfort zone’, Maude urged. ‘We should be repressing the conditioning that compels local government to constantly ask questions of Whitehall rather than the electorate,’ he said.

Bernard Jenkin, Conservative MP and chair of the public administration select committee, told the conference it would be his responsibility to assess the performance of Maude and his efficiency group when the PASC begins sitting. He said the task facing the coalition was to reverse the trend of the previous Labour government for public spending increases and productivity decreases. ‘In the face of departmental spending cuts, the need to improve productivity has moved from a luxury talked about at conferences like these to an absolute necessity,’ he concluded.

The government’s decision to ring-fence the health budget for the coming Parliament came under fire from other speakers at the conference. Colm McCarthy, chair of Ireland’s special group on public service numbers and expenditure, warned that it would only increase the burden on other departments, but that it was also ‘implausible that there’s not scope for economies’ in an organisation of the size of the NHS. ‘If a few years down the road education gets hammered and health does not, it’s difficult to explain,’ he said.

Michael Izza, chief executive of the Institute of Chartered Accountants in England and Wales, added: ‘We should not allow any notion of ring-fencing to be a euphemism for continuing inefficiency.’

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