25.11.15
Government to review public sector contracts and sick pay
The government is going to consult on further “cross-public sector” action on payment terms, to reduce the costs of redundancy payouts and ensure greater consistency between workforces.
In the 2015 Spending Review and Autumn Statement document, it was noted that the government will continue to modernise the terms and conditions of public sector workers, by taking forward “targeted reforms” in areas where the public sector still has far more generous rights than the private sector.
In particular, it will carry out a review of “sickness absence” in public sector workforces before consulting on how to reduce its impact on public service delivery, and “considering legislation where necessary”.
The document stated that public sector sick pay has been estimated to cost around £4.5bn a year and “terms are more generous than typical private sector arrangements”.
“It is right that the government reviews how the current systems for managing and compensating for sickness are working and looks at what reforms might be needed to move to a more modern and productive state,” the document states.
The Treasury also noted that, as announced in the Summer Budget, the Spending Review will freeze public sector workforce pay awards at 1% for four years from 2016-17. This is expected to protect approximately 200,000 public sector jobs.