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

Senior Product Manager - Social Care

Essex County Council
£63323.0000 - £74497.0000 per annum
Senior Product Manager - Social CareFixed Term, Full Time£63,323 to £74,497 per annumLocation
Recuriter: Essex County Council

Assistant Traffic Management and Road Safety Engineer

North Yorkshire Council
£29,064 - £34,434 per annum
Are you interested in a career in traffic engineering and would love the opportunity to learn whilst you earn? Northallerton, North Yorkshire
Recuriter: North Yorkshire Council

Road Safety Engineer

North Yorkshire Council
£38,220 - £42,839 per annum
Are you looking for a role that can make a real difference to road safety and people’s lives in North Yorkshire? Northallerton, North Yorkshire
Recuriter: North Yorkshire Council

Quantity Surveyor

Royal Borough of Greenwich
PO4 - £49,056 - £52,194
The Royal Borough of Greenwich Repairs and Investment Section Greenwich, London (Greater)
Recuriter: Royal Borough of Greenwich

Social Work Assistant

Durham County Council
Grade 6 - £28,142 - £31,022
The Team provides an effective and efficient Assessment and Care Management service to adults 18 years and over with a physical disability, older peop Durham
Recuriter: Durham County Council
Linkedin Banner