Thank you for contacting me about public sector exit payments.
I understand your concerns regarding exit payments in the public sector and I know the Government has been working to ensure these payments are fair to employees while providing taxpayers with value for money.
Following a thorough consultation on implementing changes to exit payments, I welcome that the Restriction of Public Sector Exit Payments Regulations will now carry out the legal duty set out in the Small Business Enterprise and Employment Act 2015 to cap exit payments at £95,000 across public sector organisations.
The point has been made that exit payments can often be important to an employer’s ability to adapt to new circumstances and provide vital financial support to individuals as they search for a new job. Public servants should of course be given some financial security, but this should only be in a manner that is fair and justifiable. It is also important to note that, where necessary, these regulations can be relaxed to address specific circumstances.
That said, six-figure exit payments are far in excess of those available to most workers in the public sector or wider economy, and I do not believe such payments are proportionate or fair to taxpayers who pay £0.2 billion per year for exit payments exceeding £100,000. That is why I welcome the capping of exit payments in the public sector at £95,000. Even then, I do not expect payments at this level to be the norm.
I am informed that exit payments beneath the £95,000 cap will continue to be available, so that public sector employees can support their families, find new employment. I understand that this policy has been carefully designed to protect long-serving, lower-earning staff.
Thank you again for taking the time to contact me.
