Public Sector: Redundancy Pay

Treasury written question – answered on 27th February 2020.

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Photo of Christopher Chope Christopher Chope Conservative, Christchurch

To ask the Chancellor of the Exchequer, with reference to the Small Business, Enterprise and Employment Act 2015 amended by the Enterprise Act 2016, what estimate he has made of the cost to the pubic purse in each year of the delay in the implementation of the £95,000 cap on public sector exit payments; and if he will make a statement.

Photo of Steve Barclay Steve Barclay The Chief Secretary to the Treasury

The annual Whole of Government Accounts (WGA) publications contain the cost of exit packages made by public sector employers in scope of WGA for the relevant financial year.

The Government legislated for a £95,000 cap on exit payments in the Small Business, Enterprise and Employment Act 2015 as amended by the Enterprise Act 2016. The combined total cost of exit payments over £100,000 in financial years since then (2016/17 and 2017/18) is £0.4 billion. The exit payment cap will reduce this amount by setting a limit of £95,000 on payments. Information on the 2018/19 financial year is not yet available.

HM Treasury consulted on regulations implementing the £95,000 cap last year. The Government intends to publish its response to the consultation by Summer and the regulations will be laid before Parliament this year.

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