UK government tables deeper redundancy payment cuts after court defeat

By on 29/09/2017 | Updated on 24/09/2020
Aerial view of government offices in Whitehall, London (Image courtesy: Eden, Janine and Jim).

The British government has proposed bigger cuts in redundancy payments for civil servants, after the High Court quashed changes that it made last year.

A new consultation was launched by the Cabinet Office on Monday, setting out revised terms for the Civil Service Compensation Scheme (CSCS), following the court’s July ruling against the government.

The new proposals, which apply to civil servants across the board, cap payments in voluntary redundancy and voluntary exit schemes at 15 months’ salary – three months less than the maximum agreed last year, and six months less than the system in force since 2010.

The cap on compulsory redundancy payments is held at nine months’ salary, which is the same as last year but three months less than under the existing terms. Unions have until 6 November to respond.

Back to the drawing board

The court ruled that the government had breached its statutory obligation to consult over the 2016 changes to the scheme by effectively excluding from talks the Public and Commercial Services Union (PCS), which brought the legal challenge.

The PCS is one of two unions that refused to endorse the changes, which were agreed by the FDA, Prospect, GMB, UNISON, Unite, NCOA, the Defence Police Federation and PGA.

Unions responded to the move with dismay and vowed to resist the revised proposals.

Backwards step

Naomi Cooke, assistant general secretary of the FDA, which represents senior civil servants, said: “This is a major backwards step. This new consultation proposes worse terms than those negotiated by the FDA and seven other unions last year, and removes a series of hard-won protections.

“The FDA chose to take part in the 2016 negotiations to avoid the imposition of more stringent terms by the Government, securing a series of concessions in the final round of negotiations which have all now been dropped from these latest proposals.

“We are adamant that the new CSCS should be no worse than the reformed scheme which was agreed in good faith and was backed by 89 per cent of our members in a ballot last year. We will be making robust representations to the Cabinet Office to honour the 2016 agreement.”

Concessions won in the 2016 talks that had been removed included the option of swapping a redundancy payment for a partially reduced pension up to the value of £95,000, and an increase in the salary level used to calculate redundancy payments from £23,000 to £24,500, the FDA said.

PCS’s pyrrhic victory

Gary Graham, deputy general secretary of the technical specialists’ union Prospect, said he had warned that the judicial review undertaken by PCS provided “the excuse and opportunity the government wanted to table worse terms than were ultimately negotiated”.

“By being determined to remain at the bargaining table arguing on behalf of our members, the terms Prospect negotiated included significant protections for the lowest paid and increased the maximum available for those leaving on voluntary redundancy from the initially tabled 12 month’s salary to 18 months,” he said.

“Prospect will be responding robustly to the consultation and as ever will remain at the bargaining table arguing on behalf of members. We will be holding the government to account and expect them to honour their commitments.”

From courts to talks

Cabinet Office in Whitehall, London (Image courtesy: Smuconlaw).

The PCS said it is in the process of finalising arrangements with officials to discuss the implications of the court case with ministers, adding that it is “disappointing” that the Cabinet Office has pre-empted the discussions by reopening consultation.

“PCS is concerned that by rushing into a further short consultation period on cuts to the CSCS, the Cabinet Office is not approaching the consultation in ‘good faith’ as required by law,” the union said in a statement.

“We remain determined to oppose detrimental changes to redundancy pay, and will do so through consultation, negotiation with the Cabinet Office, political interventions and any other available route.”

Trying again

The Cabinet Office said in the new consultation document that the court had recognised it has good reasons for seeking to reform the 2010 terms, and that the changes it sought would help to reduce the budget deficit and meet savings targets.


“The government believes that there are still good reasons to reform the CSCS and that it is necessary to have sustainable compensation terms in place,” it said. “This consultation therefore sets out a new proposition for reformed CSCS terms, which builds on the principles behind the 2016 reforms and is also shaped by the government’s evolving thinking as a result of that consultation as well as other events in the wider landscape of public sector exit scheme policy.”

About Liz Heron

Liz Heron is a journalist based in London. She worked on daily newspapers for more than 16 years as an education correspondent, section editor and general news reporter. She was Education Editor of the South China Morning Post in Hong Kong and has contributed to a wide range of British media including The Independent, The Guardian and the BBC.

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