Opposing the Cap on Exit Payments

Back to all Motions

2019 Local Government Service Group Conference
6 June 2019

Conference notes that in 2015 and 2016 the Government legislated for a cap of £95,000 on exit payments in the public sector. In April 2019 the Government launched a consultation on proposed draft regulations and guidance to bring the legislation into force. The consultation ends on 3 July 2019.

Conference further notes that:

1) The level of the cap has not been uprated – it remains at the £95,000 proposed four years ago, and there is no proposal to index-link it in the future.

2) An earlier government consultation on this issue suggested that public sector exit payments were “disproportionately large” without any comparable data to back up this claim. The consultation later admitted that the average exit payment in the public sector was only £25,000.

3) It is now clear that these proposals will include a cap on early conciliation settlements such as COT3 agreements, while tribunal settlements are protected. This entirely undermines the purpose of proposing early conciliation and will lead to more cases going to tribunal where settlements will not be affected.

4) The cap applies to the overall cost of the individual exiting the public sector, including money that the individual does not receive. For example for employees in the Local Government Pension Scheme (LGPS) the cap would include the cost of removing early retirement factors for those aged over 55 who are made redundant. This is called the strain payment and it is paid by the employer to the LGPS fund. The Government’s statements on this issue, for example its web news story on the consultation (“Six-figure taxpayer-funded public sector exit payments to end”) have deliberately avoided this issue, and consequently the proposals are widely misunderstood. The proposals will not only affect high earners but also moderate earners such as social workers and librarians with long service.

Conference condemns these savage proposals as an unfair attack on local government workers. The proposals do not apply to private companies providing public services, and it is clear that this is an attack aimed very clearly at directly employer local government workers. Many professionals working in the public sector could earn greater salaries in the private sector. Due to the Government’s austerity agenda, all staff in the public sector have been faced with reduced budgets, fewer resources and increased workloads. Public service workers currently feel overstretched and their good will is being abused. The constant attacks directed at public service workers and the services they provide, are having a huge effect on morale, employee relations and recruitment. To add insult to injury since 2010 local government workers have seen a fall in pay in real terms.

The proposals would also undermine collective agreements and negotiated settlements.

This Conference calls on the Service Group Executive to:

a) Work with the NEC and the other UNISON Service Groups to respond to the consultation opposing the proposals in the strongest terms, emphasising both the principled and practical objections we have to the proposals;

b) Encourage branches to respond to the consultation, providing key points and arguments that they may wish to highlight;

c) Work with Labour Link and through other parliamentary and political routes to attempt to stop (or failing, that, water down) these proposals;

d) Work with UNISON’s Press & Media and Communications teams to improve awareness among UNISON members, the press and media, and the public about these proposals, so that their unfairness is better understood.

e) Request an urgent discussion of this issue at the next meeting of the Service Group Liaison Committee, including consideration of the industrial strategy.

f) Resist any detrimental changes to the Local Government Pension Scheme arising out of this and any other attacks on exit payments.