Public sector exit payments cap poll results
15 September 2017
The policy team wanted to establish how many relevant public sector employers have made or are aware of the necessary changes ‘expected’ by government in relation to the public sector exit payments cap of £95,000.
But what are these 'expected' changes?
In September 2016 the government published their response to the consultation on ‘reforms to public sector exit payments’. The response outlined the government’s expectations that departments should begin work to produce proposals for reform for each workforce by the end of 2016.
The response document outlined the ‘Process and timeline for reform’. The detail of exit arrangements are to be negotiated at workforce level, departments responsible for the workforces will take forward the detailed design and analysis of proposals for exit payment reform, within the overall framework and principles for reform set out in the response.
The government expects departments to begin work immediately to produce proposals for reform for each workforce that are consistent with the terms set out in this document and with the government’s principles for reform. The government will consider the case for applying elements of the framework flexibly on a workforce by workforce basis. Examples of where the government may consider there is a case for flexibility may include where it can be demonstrated that a particular option may not lead to significant cost savings; where there is an alternative approach that may deliver commensurate cost savings; or where workforce demographics mean that a particular option may have unwarranted equalities or other workforce impacts.
The government expects departments to put forward proposals for reform within three months of the publication of this government response (end of 2016). Departments should then consult on proposals as appropriate and should follow the normal process of discussions and negotiations with Trade Unions and other workforce representatives in order to seek agreement to their reform proposals.
The government expects this discussion process to be concluded, agreement reached and the necessary changes made to compensation schemes and other arrangements within nine months of the publication of the response. That takes us to the end of June 2017. The response also says that should it not be possible to achieve meaningful reform for one or more workforces, the government will consider options for primary legislation to take forward reform.
Our question asked, “If the public sector exit payments cap of £95,000 applies to your payroll, have you implemented the necessary changes expected by government?”
14% said yes, they have implemented changes and equally 14% said they were planning to make changes. 28% said they had not implemented any changes and 44% were unaware of any requirements.
We hope that as a result of our poll question the latter 44% went away and found out what they are ‘expected’ to do, and that the 28% who had not made any changes, at least considered their next steps.
We run our polls for various reasons but a common one is most certainly to raise awareness of areas that anecdotally we hear may have slipped under the radar.
Regulations do not yet exist that create the public sector exit cap itself. The Treasury, Scottish Ministers and Welsh Ministers have had the power to bring forward regulations since 1 February 2017, but they have not yet done so. As stated previously the government’s expectation is that the necessary changes be made to compensation schemes and other arrangements within nine months of the publication of their consultation response (June 2017).
In both the exit payment recovery and exit payment cap reforms, the government position has been that the reforms would apply to those areas which are the responsibility of the UK government. It would be for the Scottish government, Welsh government and Northern Ireland executive to determine if and how they wanted to take forward similar arrangements in relation to devolved bodies and workforces. However, if and when a legislative consent motion is required, it would be for the devolved administrations themselves to decide whether this is a desirable approach.
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