Victory! Fat cat payoffs are banned
PUBLIC sector fat cats will be banned from receiving massive payoffs under tough new rules announced by the Chancellor yesterday.
In a huge victory for the Daily Mail, George Osborne has launched a blitz on excessive payments and perks for the publicly funded bureaucrats. Among the measures announced yesterday it was revealed a cap will be placed on the so-called ‘exit payments’ to well-paid managers who quit or are fired.
Perks such as senior staff receiving taxpayer-funded private healthcare packages will also be stopped. It comes after a series of scandals were exposed by the Daily Mail.
PUBLIC sector fat cats will be banned from receiving six-figure payoffs or taxpayer-funded private healthcare, in a major victory for the Daily Mail.
In response to a series of exposés by this newspaper, the Treasury today unveils a blitz on state-funded payouts that will save ‘hundreds of millions of pounds’.
Well-paid bureaucrats will no longer be able to get private health packages beyond the means of most families.
There will also be strict rules on how much a top police officer, NHS worker, town hall boss or other public sector manager can walk away with if they quit or are fired.
The maximum ‘exit payment’ will be £95,000 and most will be much lower.
In calculating a payoff, it will be assumed that no one earns more than £80,000 a year – despite the vast number of six-figure salaries in the state sector.
The practice of huge payouts being given to staff who are on the verge of retiring will also be ended. Payments will be reduced the closer they get to normal retirement age. Employers will also be banned from providing pension top-ups for people who are made redundant or leave voluntarily, or have strict limits on how much they can put in.
There have been cases of police and town hall bosses retiring under a cloud – yet still getting six-figure sums pumped into their already huge pension pots.
Chancellor George Osborne said: ‘Taxpayers foot the bill for the public sector and we’ve been determined to do all we can to rein in excess where we find it.
‘The Daily Mail has highlighted very effectively the areas where there are still practices that I and, I suspect, many taxpayers see as unacceptable.
‘We need to go on with the job of repairing the public finances so I am determined that we take further action.
‘We’ll rein in unfair exit payments and issue new guidance across the public sector on the highest salaries, gagging orders to cover up bad practice and the use of taxpayers’ money for private medical insurance.’ The Treasury said that, after the Mail’s revelations, it was time to lay down ‘what is acceptable and what isn’t’.
Scandals including the payment of private health insurance to public sector employees were exposed by the Mail and TaxPayers’ Alliance using requests under the Freedom of Information Act.
Over t he past t hree years, £3.43million of public money has been spent on private health insurance for council staff in England and Wales. Almost 2,000 council bosses were found to be using public money for private treatments.
Among i ndividual cases, we revealed how Oxfordshire County Council chief executive Joanna Simons, who quit her £194,000 job after a scathing report about a paedophile scandal on her watch, was given a £259,000 payoff after apparently signing a gagging clause.
We also revealed how Tricia Hart, the highest-earning hospital boss in 2014, had a pay package worth £1.26million as a result of huge pension benefits.
The Treasury said every government department is being sent new rules making it clear inflated payoff deals are unacceptable.
The edict says confidentiality or gagging clauses must be attached to payoffs only in ‘exceptional circumstances’. These have been used routinely in the NHS and elsewhere to gag whistle-blowers.
In addition to the order that taxpayers’ money should never be used to pay for private health insurance, a ban is also being introduced on highly paid staff keeping exit payments when they leave a public sector organisation and join another.
Chief secretary to the Treasury Greg Hands said: ‘Reforming public sector redundancy payments could save taxpayers hundreds of millions of pounds by 2020.’
The new regulations on payoffs will be put out for official consultation today.