Public sector payoffs will finally be capped (but limit is still £95k)
SIX-FIGURE payoffs for public sector fat cats are to be banned as ministers finally enforce a £95,000 cap on severance payments.
Redundancy packages for council executives, civil servants, NHS bosses, prison governors, headteachers and police chiefs will be limited – but only after years of delay.
The crackdown follows a Daily Mail campaign demanding an end to the scandal of obscene ‘golden goodbyes’ of up to £473,000 paid for by taxpayers.
The Tories promised in their 2015 election manifesto to halt the culture by capping redundancy payments in the public sector at £95,000. The policy was passed into law under the 2016 Enterprise Act – but the legislation necessary to put it into practice is yet to go through Parliament.
Ahead of the Chancellor’s Spring Statement next week, Chief Secretary to the Treasury Liz Truss has written to ministers seeking clearance to finally implement the cap.
In a letter to Cabinet colleagues, she said it was unfair to expect taxpayers to keep shouldering the burden for ‘very high’ payoffs.
Miss Truss wrote: ‘ I am pleased the Government was able to announce the biggest public sector pay rise in ten years this summer, with most going to the lowest-paid nurses, teachers and police officers.
‘However, the way we reward public servants must be proportionate and fair to taxpayers. The very high exit payments we have seen granted to some highly paid public sector employees in recent years clearly breach these principles.
‘It is right that the Government takes action on this to give taxpayers the confidence their money is being spent properly.’ Miss Truss, who vowed to ‘ensure that the vast majority of exit payments in the public sector are [capped] as soon as possible’, will consult on the changes before laying the necessary regulations in Parliament.
The cap will first be implemented for workers in the Civil Service, HM Prison and Proba- tion Service, the NHS in England and Wales, schools, local councils and police forces.
It will eventually apply to the whole public sector with some proposed exemptions, including the Armed Forces and the security services.
Earlier this year, it emerged that two local executives at the centre of council mergers will get redundancy deals totalling almost £1 million.
Nine local authorities in Dorset will combine to form just two next month. Jane Portman, of Bournemouth Borough Council, is to receive a pay and pension redundancy package of £473,000. Debbie Ward, of Dorset County Council, has been awarded the same amount after leaving her post in November.
In the year to March 2017, the highest payoff was to Chris West, the ‘ executive director, resources’ for Coventry Council, who received £448,230 compensation for loss of office. He took early retirement from his £150,000-a-year role after 34 years. The next highest was £359,781 for the ‘director, customer and leisure services’ for Hambleton in North Yorkshire, followed by £296,738 for the director of public health for Cheshire East. Neither was named.
David Flory, an NHS chief executive placed in charge of struggling hospitals, received a payoff of £410,000 in 2015 on top of his £210,000 salary as he stepped down from the NHS Trust Development Authority.
Married NHS managers Chris Reed and Karen Straughair received a total of almost £1 million in 2013. The couple went on to earn £120,000 for four months’ hospital work shortly afterwards.
‘Very high exit payments’