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

Local Authority Research Practitioner

Royal Borough of Greenwich
PO4 - £49,056 to £52,194
Greenwich is a great place to work. Greenwich, London (Greater)
Recuriter: Royal Borough of Greenwich

SEN Team Manager

London Borough of Bromley
MG6 Circa £60-65k
London Borough of Bromley Council is working hard to do things differently in SEND Bromley (City/Town), London (Greater)
Recuriter: London Borough of Bromley

Social Worker - Children In Care

North East Lincolnshire Council
Salary from ASYE level £36,363 up to £46,142
A service built on passion, pride and togetherness North East Lincolnshire
Recuriter: North East Lincolnshire Council

Pupil and Young Person Supervisor

North East Lincolnshire Council
NJC – point 2 FTE salary – £23,656
Lisle Marsden Church of England Primary Academy wishes to recruit a high-quality Pupil and Young Pupil Supervisors North East Lincolnshire
Recuriter: North East Lincolnshire Council

Rough Sleeper Coordinator

North Yorkshire Council
£34,434 - £38,220 per annum
With the ability to travel to other locations in North Yorkshire Harrogate, North Yorkshire
Recuriter: North Yorkshire Council
Linkedin Banner