Government to Finally Introduce Public Sector Redundancy Pay Out Cap

Five years after pledging it in the Tory election manifesto, and a year after then-Chief Secretary to the Treasury Liz Truss launched a consultation, the Government is finally set to introduce a public sector redundancy payments limit of £95,000. The decision comes just weeks after Sir Mark Sedwill raked in £250,000 from his premature sacking…

The decision appears to have come too late to be put in place this year, seemingly leading to the Treasury’s decision to scrap plans to phase in the cap in two stages; announcing it will “capture the whole public sector as soon as possible, with few exceptions”. Unsurprisingly the consultation notes that

a significant amount of responses… expressed concern over the inclusion of employer-funded early access to pensions (pension top-up payments) within scope of the exit payment cap and how this could affect long serving lower earning employees”.

Despite the consultation protests, a rare bout of civil service sense will see the cap include pension contributions. Meaning had it come in earlier, Sedwill’s leaving present would have been more than halved…

The TaxPayers’ Alliance’s James Roberts tells Guido
“This has been a long time coming, but fair play to ministers for standing up to meddling mandarins and preparing to implement this cap properly. Taking up our suggestions to include new public bodies is important – given the rate government are setting up these new quangos – and doing it in one tranche limits the loopholes departing Sir Humphreys can use to stuff their pockets on the way out. It’s just a shame the legislation had to wait until after Sedwill’s suspect golden goodbye.”

Presumably this will apply to all public bodies equally, like our national public service broadcaster the BBC and publicly owned Channel 4…

mdi-tag-outline Civil Service
mdi-account-multiple-outline Mark Sedwill
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