Sedwill's exit payment reveals ‘arbitrary’ impact of Treasury's £95k payout cap, union says

Prospect says civil servants are right to be angry about "double standards", saying the cap will hit lower-paid officials

Sir Mark Sedwill’s defence of his near-£250,000 exit payment has exposed the impact of the government's new "arbitrary" £95,000 cap on payouts to retiring civil servants, the Prospect trade union has said.

In an exclusive interview with CSW published this week, the outgoing cabinet secretary said his £248,189 compensation payment – which was green lit by the prime minister “in consideration of [Sedwill's] employment position” – is “standard” and would have been even higher if he had been made redundant.

But Gary Graham, Prospect’s deputy general secretary, said it would “not be lost on more junior civil servants” that shortly after Sedwill’s payment was approved, the government said it would forge ahead a new cap on public-sector severance payouts.

"Sir Mark has been treated shoddily by this administration – and we do not begrudge him this payment. However, the arbitrary cap will impact on long-serving, modestly-paid public servants whose jobs are at risk,” Graham said.

The union, which represents thousands of middle-grade civil servants, has campaigned against the £95,000 cap since it was announced in the wake of the 2015 general election.

"People are right to be angry at the hypocrisy and double standards which seem to apply for the sake of political expediency," Graham added.

The Treasury confirmed plans to curb payouts with an initial consultation on the £95,000 limit five years ago. Parliament then passed the primary legislation needed to implement the cap in 2016.

However, it was not until last month – in its response to a second consultation on the subject, which closed a year ago – that the Treasury confirmed secondary legislation was in the works.

The forthcoming legislation, which is needed to enforce the limit across local councils, NHS trusts, schools and police forces, as well as the civil service, will include a schedule listing all public sector bodies the cap will apply to.

The Treasury response confirmed the cap would “include all payments related to exit”, including pension top-ups.

In his interview with CSW, Sedwill noted that his exit package included a compensation payment into his pension.

“That is a calculation made by the experts for someone in my position for voluntary early retirement by agreement – that's essentially what I took. And then there is a compensation payment into the pension,” he said.

And he stressed that the sum is not a redundancy payment. He said: “There's a distinction between the two. I know it’s a significant amount of money… But if I've been made redundant, actually it would have been more than that under the terms of the Civil Service Compensation Scheme. Significantly more than that.”

CSW has approached the Cabinet Office for a comment.

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