The Government intends to end six figure exit payments for public sector workers. Six figure payments are far in excess of those available to most workers in the public sector or wider economy and it is important to ensure that these are fair or offer value for money to the taxpayer who funds them.
Between 2011-12 and 2013-14 the cost of exit payments in the public sector was around £6.5 billion. More than £1 billion of this cost came as a result of exit payments costing more than £100,000. The Government therefore proposes to introduce a cap of £95,000 on the total value of exit payments.
The Government is applying these measures to bodies classified within the central and local government and non-financial public corporation sectors as determined by the Office for National Statistics (ONS).
The Government has consulted with all interested parties about the calculation of compensation terms and employer-funded early retirement in circumstances of redundancy. These provisions will be included in the Enterprise Bill and I am assured that the measures will be scrutinised fully by both sides of the House.