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

Area Programme Director

Future Hampshire
c. £130k
You will work closely with our Senior Responsible Officer and his deputies to develop a robust and achievable transition plan. Hampshire
Recuriter: Future Hampshire

Unitary Programme Director (Mid Hampshire)

Future Hampshire
£120k
Across Hampshire, four new unitary councils are being created and this role will work within the wider programme Hampshire
Recuriter: Future Hampshire

Complaints Officer - 12 month Fixed Term Contract

Essex County Council
£27568.00 - £32432.00 per annum + +26 Days Leave & Local Gov Pension
Complaints OfficerFixed Term, Full Time£27,568 to £32,432 Per AnnumLocation
Recuriter: Essex County Council

Procurement Manager

Alongside
£24,000 per year
Alongside is the new name for Julian House. Bath, Somerset
Recuriter: Alongside

Social Worker

Gloucestershire County Council
£38,220 - £40,777
Are you an experienced Social Worker? Gloucestershire
Recuriter: Gloucestershire County Council
Linkedin Banner