26.05.15
Plans to cap public sector redundancy payments included in Queen’s Speech
Redundancy payments for public sector workers are to be capped below six figures under new legislation to be included in the Queen’s Speech.
The proposal to ban ‘golden parachutes’ for those in the public sector was in the Conservative manifesto and will be form part of the Enterprise Bill, which is also going to feature a roll-back of company regulation, under business secretary Sajid Javid MP.
The exact amount of the cap is still to be determined but the treasury expects it to be around £95,000. It will apply to those in the Civil Service and NHS but not the BBC.
This is likely to be considered controversial as while some of the highest packages in recent years include ones worth more than £450,000 in the Civil Service and £500,000 in the NHS, the BBC has seen payouts of more than £1m.
Only those earning less than £27,000 will be exempt from the cap.
The chancellor, George Osborne MP, said: “It is not right that working people should have to fork out for golden parachutes worth hundreds of thousands of pounds for public sector workers when they are made redundant.
“That’s why we are delivering on our pledge to end six figure pay offs for the best paid public sector workers, ensuring fairness and value for money for the taxpayer.”
The government also announced that reforms made last parliament to clawback exit payments made to public sector workers who return to the same part of the public sector in a short time will also be implemented.
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