Quick Search

Government Confirmed Reforms to Public Sector Exit Payments

On 26th September 2016, the government has published its response about reforms to the public sectors exit payments consultation. The changes will apply to the 5 million public sector workforce, including NHS workers, Civil servants, teachers, Local government workers, police officers, armed forces personnel and fire fighters.

In a statement, the treasury confirmed that 350 responses had been received to the consultation, which included feedback from public sector organisations, unions and individuals.

According to the government, the changes were necessary to safeguard consistency between public sector redundancy compensation. The new framework for exit payment have been designed to guarantee a “fair and appropriate” level of compensation for staffs who are required to leave public sector jobs, whether on a voluntary basis, compulsory redundancy or through retirement.

For government Departments, it is now compulsory to produce proposals for reform for each of their respective workforce. The proposal must be reliable with the terms set out in the new framework. The Treasury has set out a deadline of 9 months for the changes to be made.

The government is already committed to introduce two measures on public sector compensation. The two measures includes:

  • Cap on public sector exit payments at £95,000
  • ‘Clawback’ mechanism on redundancy compensation

Under the ‘clawback’ mechanism, a highly paid individual who returns to the public sector shortly after receiving an exit payment will be forced to refund their redundancy compensation.

The proposed changes that vary from the existing NHS redundancy arrangements are:

  • Maximum tariff for estimating exit payments of 3 weeks’ pay per year of service
  • A taper on the sum of lump sum compensation an individual is enabled to collect as they get nearer to their average pension retirement age. 
  • A maximum of 15 months payment that can be paid as a redundancy payment

David Gauke, Chief Secretary to the Treasury said the reforms guarantee public sector exit payments are fair and consistent. By using these changes in the Public sector workforce, Applicable standards will be in place for staffs and public services will remain protected.

For more updates from National Health Service and UKs' Healthcare system, Visit our blog page regularly. 

Recruitment Synergy is a Medical Recruitment Agency based on London, UK. Remember us for Locum, temporary and permanent jobs across UK. We also provide compliance and migration consultation to our candidates.