UK coalition plans to cap public service payouts to one year's pay

COMPULSORY REDUNDANCY payments for British civil servants will be limited to one year’s pay under new non-negotiable rules, public service unions were told yesterday.

The decision provoked fury in the Public and Commercial Services Union (PCS) which last year successfully foiled an attempt by the last government to limit payouts to two years’ pay.

In a challenge to the high court PCS had argued that, under the 1972 act, the plan to limit payouts could not be imposed without its consent. The other five public sector unions had approved the Labour plan at the time and some are understood to be furious with the PCS for leaving them in a situation where their members could now be worse off.

Under the current rules, some retiring civil servants can get lump sums worth up to six years’ pay, said cabinet office minister Francis Maude, though it is understood that just a few hundred have done so. Average payouts of about £60,000 are made – almost three times the average civil service salary of £21,000. In all, civil service redundancy payments have cost the taxpayer £1.8 billion over the last three years.

“What is on offer now is simply untenable and completely out of kilter with that is on offer in the wider public sector and private sector,” Mr Maude told the Civil Service World conference in London. Refusing to negotiate on the new compulsory redundancy terms, he said he was open to talks about limiting payoffs to 15 months’ pay for those leaving public sector jobs voluntarily.

PCS’s general secretary Mark Serwotka said it was absolutely outrageous that the government was seeking to change the law given that the High Court had twice ruled in favour of the union.

“The court has ruled that detrimental changes to our members’ terms and conditions cannot be made without their agreement. This is clearly an attempt to make massive job cuts, which makes no economic sense at a time of recession,” he said.

Prospect, which represents 120,000 public sector workers, vowed to fight the proposed changes, saying that tens of thousands of their members could be laid off because of spending cuts.

Dai Hudd, Prospect’s deputy general secretary, said: “The government wants to rip up their rights in a way that would do justice to King John, but it will not work. These rights are protected by law and bully-boy tactics will not get round that fact.”

Meanwhile, Mr Maude insisted that poorly performing public sector workers must face pressure to improve. “I sense some discomfort that the under-performing few are too often carried by the hard-working majority,” he said.