05.01.15
Conservatives pledge to cap public sector redundancy payments
The Conservatives will cap public sector redundancy payments if they win the general election in May.
In a new manifesto pledge, the Tories will commit to capping pay-outs at £95,000 for workers in the public sector. Only those earning less than £27,000 will be exempt from the cap.
Treasury minister Priti Patel MP said taxpayers should not have to fund "huge pay-outs when well-paid people get made redundant".
The proposal follows a number of controversial pay-offs funded by the taxpayer, including some payments of more than £450,000 in the civil service and £500,000 in the NHS. The BBC, which has its own governance arrangements, will also fall under the cap. Although it is funded by the licence fee rather than general taxation, it has attracted controversy for awarding pay-outs of more than £1m.
“We’re going to do something that’s long overdue and that will bring some fairness back to the system – we’re going to introduce a new public sector redundancy pay cap,” Patel said.
“This goes to the heart of our long-term economic plan for Britain – it’s about backing hardworking taxpayers and making sure the economy is tilted in their favour. And it’s about saving money so we help bring down our deficit and make our economy more financially secure.”
The Coalition government has already moved to reclaim redundancy payments to public sector workers who are rehired, including the measure in the Small Business, Enterprise and Employment Bill currently going through Parliament.
Labour described the move as too little, too late, saying many huge pay-outs to NHS executives have already been made during the government’s reorganisation of the health service.
Jamie Reed, the shadow health minister, said: “David Cameron can’t get away from the fact that this horse has already bolted. He wasted £1.6bn on redundancy pay-outs to NHS managers as part of his reckless reorganisation.
“Frontline NHS staff found it galling that 4,000 managers who received payoffs are now back in NHS jobs.
“The government wasted billions on its reorganisation while patients are waiting hours on end in A&E and longer for cancer treatment too – proof you can’t trust the Tories with the NHS.”
Dave Penman, general secretary of the FDA, which represents senior civil servants, said the cap would hit many ordinary public sector workers.
He told BBC Radio 4's Today programme: "This is being portrayed as an attack on fat cats. The reality is this scheme will impact upon nurses, police officers, firefighters, midwives, as well as the people who I represent who are better paid."
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