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

Maintenance Manager Street Lighting

Durham County Council
£38,220 - £41,771 (pay award pending)
Are you an experienced electrical or highways professional with strong leadership skills and a passion for delivering safe, high-quality services? We Durham
Recuriter: Durham County Council

Construction Manager Street Lighting

Durham County Council
£47,181 - £51,356 (pay award pending)
We are looking for a highly motivated and experienced Street Lighting Construction Manager to lead the delivery of our street lighting maintenance and Durham
Recuriter: Durham County Council

Service Manager - Supported Accomodation Service

Durham County Council
Grade 16, £56,554 - £60,680 per annum
Every young person deserves the chance to feel safe, valued and hopeful about their future. In County Durham, we are creating something special. We a Spennymoor
Recuriter: Durham County Council

Cleaner

Durham County Council
£24,796 (pro rata)
Permanent Conract – Part Time, 12.5 hours per week
Recuriter: Durham County Council

Social Worker

Durham County Council
Grade 9 (Pre-progression) - £35,412 - £39,152 / Grade 11 (Post Progression) - £40,777 - £45,091
Durham County Council has exciting opportunities for two permanent Social Workers to join our Community Mental Health Teams based within the Dales and Spennymoor
Recuriter: Durham County Council
Linkedin Banner