News story

Government ends six figure exit payouts

Redundancy payments for public sector workers will be capped as part of the Enterprise Bill in the Queen’s Speech.

Redundancy payments for the best-paid public sector workers will be capped below six figures as part of the Enterprise Bill in the Queen’s Speech, the government has announced.

This will ensure fairness and value for money for the taxpayer, and could save millions of pounds – in 2013, nearly 2,000 (1,838) public sector employees received payouts over £100,000.

The government is minded to cap payouts at £95,000, but will consult on details such as the exact amount and public sector employers that are covered as part of the legislative process.

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 as planned.

Chancellor of the Exchequer George Osborne 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.

Chief Secretary to the Treasury Greg Hands said:

We are delivering our manifesto commitment to end six figure payoffs for the best paid public sector workers.

It is wrong that hard-working taxpayers, many on low salaries, have to fund huge pay outs when well-paid people get made redundant.

These reforms will ensure fairness and value for money across the public sector.

Published 23 May 2015