From the TUC

Crude caps on public servants’ redundancy payments are not value for money

03 Aug 2015, by Guest in Public services

Despite a settlement on redundancy terms agreed with the last Minister for the Cabinet Office, Matt Hancock’s Cabinet colleague, Francis Maude, which he described at the time as “for the longer term” the government seems intent to rush yet another change less than five years after the previous radical set of changes.

That the government seeks to reduce the cost of making civil servants (and others in the public sector) redundant ahead of cutting hundreds of thousands of jobs is hardly surprising. However, private sector experience of workforce reductions should teach us all that managing radical change requires less stick and more carrot in order to succeed.

Morale is low in the civil service. The prospect of more than a decade of year on year pay cuts; a divisive performance management system ; restrictions on civil servants’ freedom of speech; and ever increasing workloads that are taking people to breaking point is hardly a recipe for a happy workplace. Introducing an arbitrary cap on the cost of individual exit packages isn’t about managing the public sector workforce, it’s about punishing those who have dedicated their careers to the public service.

The Government portrays the cap as being something only for high earners to be concerned about. This is deliberately misleading. Many public servants commit their entire career to public service. So when offers of redundancy come along, those with longer service tend to be the ones that volunteer and often receive early payment of pension in lieu of a lump sum. That’s why the reality is that that it will be, teachers, social workers, nurses and firefighters who will be caught by this. You could be a long serving public servant earning less than £28,000 a year and be hit by the cap – the government are well aware of this. When they originally announced the policy before the election they committed protect the earnings of those earning under £27,000 a year. This consultation shows that they are not even proposing to honour that.

The situation in the public sector is far worse than in the private sector for one, perhaps surprising reason. There is a complete absence of an adequate redeployment process. So while department ‘A’ is crying out for a finance director with experience and skills, department ‘B’ is trying to make two redundant. Coordination between departments takes time and needs the resources that are being starved from central government.

The irony is of course, that the very people who are being tasked with delivering the government’s demanding agenda, ever more for ever less, are the very ones that this will continue to demoralise. Arbitrary caps – whether it’s on pay levels or redundancy payments – may make good sound bites before an election, but they rarely make good policy.

Public services face a huge challenge over the coming years. They need to continue to attract and motivate the best talent, while at the same time managing another significant reduction in staffing. I fail to see how this sort of approach can help it do either.

One Response to Crude caps on public servants’ redundancy payments are not value for money

  1. N Trowell
    Aug 5th 2015, 9:22 pm

    What are views on the relevance of the requirement for fair compensation being paid for being deprived of property in the public interest under Article 17.1 of the EU Charter of Fundamental Rights? Parliament says the Charter applies in the UK – and the EU website says that Charter rights replicate those existing in national law. I have never had a proper reply to this question (or how it relates to the 2012/13 revision of civil service pension arrangements).