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The existing redundancy compensation scheme for civil servants is "simply untenable", Francis Maude has said.
In a speech addressing civil servants at the Civil Service Live event in London Olympia this afternoon, Maude said the existing compensation scheme was "hugely out of kilter" with redundancy packages in both the public and private sectors.
"Reform is going to mean making some hard choices ahead and showing courage and determination to see them through," the Cabinet Office secretary said.
"To play its part in deficit reduction, the civil service must reform its terms and conditions for pay, pensions and compensation in the event of redundancy in a way which is modern, flexible and appropriate to the times".
According to the Cabinet Office some longstanding employees are eligible for a package worth over six years’ pay.
Maude announced this morning that he will introduce legislation to cap the amount of redundancy payments made to civil servants.
Under the plans compulsory redundancy payments will be limited to twelve months pay and payments for voluntary exits will be limited to fifteen months salary.
The Coalition will also look at introducing an absolute cap on the amount that can be paid out to any individual.
In a letter to Paul Noon, the chair of the Council of Civil Service Unions (CCSU), Maude said the measures were necessary due to the "unilateral action" the Public and Commercial Services Union (PCS) took against previous attempts at reform.
"Our action today to limit the excesses of the current prohibitively expensive terms is necessary because of this unilateral action in contesting the previous government’s scheme," he said.
The previous government introduced a revised scheme earlier this year to introduce a two year cap on the payment of compensation.
He added: "Having acted swiftly to limit the costs of future compensation payments I would now like to focus on the future and, specifically, on how we - in conjunction with the unions – might seek to negotiate a sustainable and practical long term successor scheme."
But the PCS said Maude's statement "betrays a breathtaking arrogance and a contempt for his own workforce".
In a statement the union's general secretary Mark Serwotka said he would be exploring the "legal implications" of the announcement.
"This is not just about our members’ rights at work, it is about their ability to serve the public. There would be no plan to save money on redundancy pay without a plan - the detail of which has not been revealed to the public or the unions - to make job cuts on an unprecedented scale.
"If this so called “fair and progressive” coalition government get away with this, it would lay waste to communities across the UK where people rely on the services that our members and other public servants provide."
In his speech to Civil Service Live, Maude sought to soften the blow by praising the work of the civil service.
"The service is admired throughout the world for the way in which it serves the elected government of the day," he said.
"The work done by civil servants in the aftermath of the General Election and the transition to the new coalition government exemplifies this excellence."
Article Comments
This Government has been told twice that it has broken the Law and that Redundancy Terms and conditions count as accrued rights which was determined by the PCS unions legal challenge. Having lost the legal arguement this Government now intends to change the law. This agreement was entered in to by both the Trade Unions and the then Conservative Government in 1987. If the current government wishes to amend the terms then please enter into negotiations with the Trade Unions on an equitable basis to produce a new schem for the future but retaining the accrued rights of those staff employed prior to the change. But of course this doesn't meet the current governments requirement to slash over 600,000 jobs on the cheap despite the fact that all legal evidence to date has shown that it is illegal to do so. The majority of Civil Servants earn less than 20,000 pounds and their pensions are on average betwen 4000 and 7000 pounds. Are these really the people who have to pay for the previous governments mistakes. Are the MP's with their huge salary's and gold plated pensions going to do their bit for the country by putting a cap on their redundancy pay i.e. a 40,000 pounds cap on all redundancy payments. I somehow think not. At a time when the governments aim is to dispense with 600,000 plus public sector jobs is the timing not suspicious. Also, how much are the government/tax payer really going to save by making people earning less than 20,000 pounds redundant. By the time you lose the tax revenue (Income /VAT) and pay out unemployment benefit the savings are going to be insignificant. It just doesn't add up.
I can see the need to curtail the excesses of the previous government with Council Leaders getting 400,000 pounds plus especially when you consider the PM only gets paid 150,000 pounds but to penalise the lowest paid workers is unacceptable.
David
17th Jul 2010 at 6:26 am
I just cant believe I would only get 12 months redundancy if i'm made redundant after more than 20 yrs being a civil servant - where's the fairness in that. I bet Francis Maude earns a lot more than me so it doesn't matter to him!!!! But to lose what I would have got is a huge blow and a big hole in the pocket when life's hard enough as it is!!!!
darren pullen
6th Jul 2010 at 3:06 pm
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