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

Apprentice Highway Design x2 posts (CDC)

City Of Doncaster Council
Grade 3, £24,796
Do you want to work in a job which makes a difference to the local community and the people who live there? Doncaster, South Yorkshire
Recuriter: City Of Doncaster Council

Facilities Property Technician (CDC)

City Of Doncaster Council
Grade 6, £26,403 - £27,255
This is an exciting opportunity to join the Council’s Facilities Management Team Doncaster, South Yorkshire
Recuriter: City Of Doncaster Council

Service Manager - Children in Care,Leaving & AfterCare & Foster

Essex County Council
£66899.0000 - £76280.0000 per annum
Service managers are accountable for performance and delivery of a lead service area. England, Essex, Basildon
Recuriter: Essex County Council

Part Time AAT 4 Qualified Accounting Technician

Essex County Council
£28090.00 - £33047.00 per annum + Pro Rata
Part Time AAT 4 Qualified Accounting TechnicianFixed Term, Part Time£28,090 to £33,047 per annum, full time equivalentLocation
Recuriter: Essex County Council

Finance Officer - 12 month Fixed Term Contract

Essex County Council
£25081.00 - £27653.00 per annum + + 26 Days Leave & Local Gov Pension
Finance OfficerFixed Term, Full Time£25,081 to £27,653 per annumLocation
Recuriter: Essex County Council
Linkedin Banner