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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."

Tell us what you think – have your say below or email [email protected]


Dan Filson   05/01/2015 at 12:28

£27,000 is not a huge public sector salary, and if you are made redundant at a salary of this or a few thousand more, why should your redundancy payment be capped when those in the private sector are not. The consequence could be that if redundancy payments are constrained in the public sector, either fewer will be willing to work there or they will seek more immediate remuneration that cannot be tampered with by gallery-playing governments.

Rob   05/01/2015 at 13:29

I believe that most public sectors workers receive just the statutory minimum redundancy payment. Its hard to understand how a £95k cap is going to effect the vast majority of Health Service workers, emergency services or local government. I think this makes good headlines designed to mislead the general public about public sector redundancy payments.

Nina Walters   05/01/2015 at 13:33

You dont have to have been mystic Meg to have seen all this in the pipeline back in 2010 when the conservatives/coalition won the election and the public spending cuts that ensued. History has a habit of repeating itself. 'Austerity measures' were supposed to save money from the surplus of managers and senior executives spending a lot of time going to meetings about meetings and pushing pens. It seems to me that what happenned is more money spent on reorganising confusion into greater confusion, large to huge pay-outs enabling early retirements etc. I work as a charity 'support worker' on 17,000 ( not much than a pound an hour over the living wage). A lot of us have degrees and a wealth of frontline experience and skills and we got nothing except stress, disrespect and bullying passed down ('displaced') through the ranks of those trying to justify their positions. Even in the voluntary sector, in large organisations they mirrored statuatory- managers on over inflated salaries, often mortgage paid off then retire early on a nice salary, or go back in to other well paid management. Leaving rent- payers and other strugglers to 'hold the fort'. It is the most vulnerable I worry about- and that are the hidden victims of this waste, financial exploitation, neglect and mis-management. For example is anyone with any conscience even beginning to recover from the shock of the Rotherham and other CSE scandals and failurres of 'trusted' instituations?- let alone take effective I repeat EFFECTIVE action? The 'Big society', of people striving for greater compassion, courage, and integrity, paradigm shifts and quantum leaps are all sorely needed- for all of us, lets still make it happen.

Patrick Lane   05/01/2015 at 16:46

I have worked in local government for 32 years and currently earn just under £40K a year. My redundancy payment, should I be unfortunate enough to be made redundant, will only be £17K. This is a long way from the £95K cap the Tories are proposing. Very few people in the public sector walk away with golden handshakes these days, so I agree with one of the comments above and cannot see that this will save very much.

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