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

Legal Administration Officer - Harlow Council

Essex County Council
Up to £15.0000 per hour
Legal Administration Officer - Harlow CouncilHarlow, Essex Full time, Temporary Up to 6-Months £15.00 PAYE / £19.21 Umbrella per hour Closing Date
Recuriter: Essex County Council

Wellbeing and Independence Practitioner - FTC (31/0327)

Essex County Council
£33049.00 - £37698.00 per annum + + 26 Days Leave & Local Gov Pension
Wellbeing and Independence PractitionerFixed Term, Full Time£33,049 to £37,698 per annumLocation
Recuriter: Essex County Council

Facilities Assistant

Essex County Council
Up to £25959.00 per annum
Facilities AssistantPermanent, Part Time£25,959 per annumLocation
Recuriter: Essex County Council

Workshop Fitter

Durham County Council
£32,597 £36,363
You will be based at Chilton Depot     Fleet Services in Environment are looking for a Workshop Fitter to join their Team.   WHAT IS INVOLVED? To und Durham
Recuriter: Durham County Council

Professional Development Officer

Durham County Council
Grade 11 - £40,777 - £45,091
As the largest local authority in the North-East this is an exciting opportunity to influence the development and practice of the Adult Social Care wo Spennymoor
Recuriter: Durham County Council
Linkedin Banner