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Wednesday 17 February 2021

Revoking the £95k cap on public sector exit payments

By Lucille Thirlby

Back in December, we launched a Judicial Review of the Restriction of Public Sector Exit Payments Regulations, which the government had introduced in November 2020 to cap exit payments in the public sector at £95k.

We’ve now been informed that the government has decided to withdraw these regulations.

The £95k cap was a blunt and pernicious piece of legislation, which had been hanging over the public sector for a number of years but was inexplicably rushed through in the Autumn. It potentially fell foul of several areas of legislation, including equality, and the manner of its implementation also meant that the government had not met its statutory obligations on consultation.

We are now exploring with the Cabinet Office the implications of this decision, whether the cap has applied to any individuals and the process for restoration.

We obviously welcome the decision of the government to withdraw the legislation. This was an unnecessary distraction at a time of national emergency. It was an ill-thought-out policy, borne more of soundbite rather than reason, and the whole affair now ends in a costly collapse for the taxpayer.

In the last decade, we have engaged and negotiated three times to reform the Civil Service Compensation Scheme. Indeed, the current consultation from the government has now been ongoing for more than three years. Time and again we have demonstrated a willingness to engage and compromise, but despite this, the government decided to try to railroad through sweeping legislation across the public sector.

I hope the government now reconsiders its approach. This was not simply a matter of rushed legislation, but also the malevolent policy objective behind it. Redundancy and voluntary exit payments are designed to compensate individuals, taking account of their salary level and the length of their employment.

Arbitrary caps on these simply punish those who have dedicated a lifetime to public service and are doing some of the most complex and critical roles in government. In reality, many of these exits can be avoided and it is somewhat ironic that in a year when the government has forced the costly exit of some its most senior civil servants, it chose this path.

We will now continue to focus on supporting members and the service for the many challenges ahead without this unnecessary distraction. If anyone has concerns about the cap and whether it has applied to them, please contact info@fda.org.uk.

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