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Queen's Speech: Clampdown on public sector 'excessive redundancy payments'

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Higher-earning public sector employees will be prevented from taking redundancy payments if they walk into a new job in the same sector within a year.

Measures to “limit excessive redundancy payments across the public sector” were announced in today’s Queen’s Speech.

The rule will apply to staff earning more than £100,000, who will have to hand back their redundancy pay should they get another job in the same sector within 12 months, as well as those earning less than that.

A Treasury spokesman said someone earning £90,000 a year would have to pay back a higher percentage of their redundancy money than someone who earned £80,000.

However, there is no indication as yet of what the lower threshold limit will be.

The Treasury spokesman said redundancy repayments would be pro-rated. Someone who left a post and rejoined a similar organisation in the public sector after two months of being unemployed would have to pay back more money than someone who found a new job after 11 months, he said.

In an introduction to the Queen’s Speech detailed documents, Prime Minister David Cameron and deputy Prime Minister Nick Clegg wrote: “Measures will be taken to stop the revolving door of big redundancy pay-outs for highly paid public servants.”

In an interview with Sky News at the weekend, Nicky Morgan (Con), financial secretary to the treasury and minister for women, said she thought the public found it “hard to take” when they saw individuals working in the public sector receive a redundancy pay-off before “popping up in another job”.

“This is taxpayers’ money that we’re talking about,” she said. “People work very hard to pay those taxes and…we’ve seen in the NHS, we’ve also seen in local government, sometimes there are people who are made redundant and the idea about redundancy payments and ex-gratia payments and severance payments is to bridge that gap while people are looking for a new role or potentially until they reach retirement age.

“I think people feel very hard done by when they see the same person appearing, popping up in a new job within months, having had a huge payoff and then are back.”

She said a 12-week consultation on the plans would follow, which the Treasury spokesman said would happen in “a few weeks”.


Quotes: Murnaghan, Sky News

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