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

Senior Residential Worker

Wakefield Council
£35,412.00 to £38,220.00, Grade 8
Exciting opportunity – Senior Residential Worker needed in our Children’s Home! Wakefield, West Yorkshire
Recuriter: Wakefield Council

Panels QA and Projects Lead

Wakefield Council
£38,613.67 to £41,590.89, pro rata. Grade 10. Term Time
You will be collaborative and efficient, chairing our established multi-agency Alternative Provision Panels Wakefield, West Yorkshire
Recuriter: Wakefield Council

Enhanced Senior Social Worker

Wakefield Council
Career Grade 10 to 11
We are seeking Social Workers to join our superb Locality Services. Wakefield, West Yorkshire
Recuriter: Wakefield Council

Content creator

Oxfordshire County Council
£29064 - £31022
About the Role You'll be surrounded by marketing and creative specialists who will use the content you produce to tell the story of the council as part of planned campaigns and marketing communications. Your high impact, creative, audio and video storyte Oxford
Recuriter: Oxfordshire County Council

Senior Community Engagement Officer

Oxfordshire County Council
£31537 - £34434
About the Role We are looking for an enthusiastic, self-motivated, confident person to join our team as our Senior Community Engagement Officer at Oxfordshire County Council's Trading Standards Service. As the leading member of our “Prevention” team Graham Hill House, Electric Avenue, Ferry Hinksey
Recuriter: Oxfordshire County Council
Linkedin Banner