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

Highways Officer

North Yorkshire Council
£34,434 - £38,220 per annum
Are you interested in joining our friendly and welcoming Area 5 Highways team Skipton, North Yorkshire
Recuriter: North Yorkshire Council

Registrar

North Yorkshire Council
£29,064 - £34,434
As a Registrar, you’ll play an essential role within North Yorkshire’s Registration Service Selby, North Yorkshire
Recuriter: North Yorkshire Council

Registrar

North Yorkshire Council
£29,064 - £34,434
As a Registrar, you’ll play an essential role within North Yorkshire’s Registration Service Northallerton, North Yorkshire
Recuriter: North Yorkshire Council

Registrar

North Yorkshire Council
£29,064 - £34,434
As a Registrar, you’ll play an essential role within North Yorkshire’s Registration Service Richmond, North Yorkshire
Recuriter: North Yorkshire Council

Operational Supervisor

Durham County Council
Grade 8 - £32,597 - £36,363
Do you inspire and motivate others? Are you an encouraging, supportive supervisor with the skills to lead, develop and empower a dedicated team to ach Durham
Recuriter: Durham County Council
Linkedin Banner