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

Combatting Drugs Partnership Coordinator

London Borough of Richmond upon Thames and London Borough of Wandsworth
£46,206 - £ 55,992
Combatting Drugs Partnership Coordinato... Twickenham, Greater London
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth

Data Architect

Essex County Council
£62461.0000 - £73483.0000 per annum
Data ArchitectPermanent, Full Time£62,461 to £73,483 per annum Location
Recuriter: Essex County Council

Social Care Officer

Sandwell Metropolitan Borough Council
Band E, SCP 18-25 (£31,537 – £36,363 per annum)
Make a Real Difference Every Day! Sandwell, West Midlands
Recuriter: Sandwell Metropolitan Borough Council

Housing Hub Officer

Sandwell Metropolitan Borough Council
Band D, SCP 9 -17 (£27,254 - £31,022) per annum
Have you got a passion for giving excellent customer service? Sandwell, West Midlands
Recuriter: Sandwell Metropolitan Borough Council

Substance Use Practice Advisor

Durham County Council
Grade 11 - £40,777 - £45,091
Are you a practitioner with experience of working with families affected by drug and/or alcohol use, delivering substance misuse interventions, and of Durham
Recuriter: Durham County Council
Linkedin Banner