Consultation on capping public sector redundancy payments

03 August 2015

The Treasury has published a consultation capping redundancy pay-offs for public sector workers at a maximum of £95,000, following controversy over large taxpayer-funded payments to officials.

The cap will apply to all forms of compensation including redundancy payments, pension top ups, compromise agreements and special severance payments.

The new cap, to be enforced through legislation, will apply to all major public sector workforces including the Civil Service, councils, the health service, schools and most quangos.

The Government announced their intention to end six figure redundancy payouts in this year’s Queen’s Speech. They are keen to hear views in the consultation on whether they should go further than a £95,000 limit, and precisely which public sector organisations should be in scope.

The Government says it expects public service broadcasters, including the BBC, Bank of England and some regulatory bodies outside the scope of the legally-binding cap to follow suit and implement equivalent restrictions.

The consultation closes on 27 August 2015. The Policy Team will publish a survey shortly if deemed necessary.