Treasury pushes to implement public sector redundancy cap

12 Mar 19

Redundancy packages for senior public sector workers are likely to be capped at £95,000, as the government seeks to implement the policy passed into law in the 2016 Enterprise Act.

The Conservatives vowed to cap so-called ‘golden goodbye’ packages in their 2015 manifesto and, although it was passed into law in 2016, the legislation necessary to put it into practice has yet to go through parliament.

However, a spokesperson for the Treasury told PF: “The government is currently considering options for implementing the public sector exit payment cap and will provide an update in due course. We are determined that taxpayers will have confidence in how their money is spent.”

Reports in the Daily Mail this week claimed chief secretary to the Treasury Liz Truss has written to ministers seeking clearance to implement the cap.

“I am pleased the government was able to announce the biggest public sector pay rise in ten years this summer, with most going to the lowest-paid nurses, teachers and police officers,” Truss was quoted as writing.

“However, the way we reward public servants must be proportionate and fair to taxpayers. The very high exit payments we have seen granted to some highly paid public sector employees in recent years clearly breach these principles.”

The Mail reported that the cap will first be implemented for workers in the Civil Service, HM Prison and Probation Service, the NHS in England and Wales, schools, local councils and police forces – and will eventually apply to the whole public sector, although with some proposed exemptions, including the armed forces and the security services.

It claimed a number of public sector executives have received payments of between £300,000 and £450,000 for leaving their posts in recent years.

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