Martin Ford 12 February 2021

Treasury scraps cap on public sector exit payments

Treasury scraps cap on public sector exit payments image

The Government has dropped its controversial cap on public sector exit payments after admitting it had ‘unintended consequences’.

A limit of £95,000 on payments to council staff leaving their jobs came into force in November in the face of fierce opposition from unions.

The High Court was due to hear a joint legal challenge by Lawyers in Local Government (LLG) and the Association of Local Authority Chief Executives (ALACE) and a second case brought by Unison next month.

But today the Treasury issued new guidance revoking the pay cap following an ‘extensive review’ that ‘concluded that the cap may have had unintended consequences’.

Partner at Greenburgh and Company, Mark Greenburgh, who was due to represent ALACE and LLG, said: ‘We are pleased that the Government has seen sense.’

While he said it was, as yet, unclear what this would mean for the litigation, Mr Greenburgh added: ‘We await the proposals to include costs for our clients.’

LLG and ALACE had argued the cap clashed with local government pension scheme (LGPS) regulations and changed the terms of employment of existing council workers.

Today’s guidance said former employees affected by the cap between November 4 and February 12 should ‘request from your former employer the amount you would have received had the cap not been in place’ and ‘the Treasury’s expectation is that they will do so’.

The Treasury said it would still ‘bring forward proposals at pace’ to tackle ‘unjustified’ exit payments, adding: ‘Employers should always consider whether exit payments are fair and proportionate.'

 

SIGN UP
For your free daily news bulletin
Highways jobs

Technical Officer

Ashfield District Council
£29,777 - £32,076 per annum (pay award pending)
Do you have what it takes to be part of the solution? Sutton-In-Ashfield, Nottinghamshire
Recuriter: Ashfield District Council

PWT/Labour Support

Telent
Negotiable
You will be carrying out PWT (Protection Worker on the Track) duties and protect staff whilst on or about the track during engineering hours and to as England, London, City of London
Recuriter: Telent

PWT/Labour Support

Telent
Negotiable
You will be carrying out PWT (Protection Worker on the Track) duties and protect staff whilst on or about the track during engineering hours and to as England, London, City of London
Recuriter: Telent

Receptionist

Chelmsford City Council
£22,074 per annum, pro rata
The successful applicant must be organised and confident with a flexible approach and a proven track record Chelmsford, Essex
Recuriter: Chelmsford City Council

Procurement and Supply Chain Manager

Sheffield City Council
Grade 9 (£44,428 to £48,474)
Are you looking for an opportunity to develop your career, while supporting the delivery of strategic priorities for Sheffield? Sheffield, South Yorkshire
Recuriter: Sheffield City Council
Linkedin Banner

Partner Content

Circular highways is a necessity not an aspiration – and it’s within our grasp

Shell is helping power the journey towards a circular paving industry with Shell Bitumen LT R, a new product for roads that uses plastics destined for landfill as part of the additives to make the bitumen.

Support from Effective Energy Group for Local Authorities to Deliver £430m Sustainable Warmth Funded Energy Efficiency Projects

Effective Energy Group is now offering its support to the 40 Local Authorities who have received a share of the £430m to deliver their projects on the ground by surveying properties and installing measures.

Pay.UK – the next step in Bacs’ evolution

Dougie Belmore explains how one of the main interfaces between you and Bacs is about to change.