Civil service redundancy shake-up could lead to "significant" industrial unrest, warns Prospect union

Specialist union's formal response to Cabinet Office's planned shake-up of Civil Service Compensation Scheme warns of impact on workforce management – and raises prospect of industrial action

By Matt Foster

09 May 2016

The Cabinet Office's planned overhaul of civil service redundancy terms shows a "disdain" for the workforce and could spark "significant" industrial unrest, trade union Prospect has warned.

The Civil Service Compensation Scheme (CSCS) was last reformed in 2010 after long-running talks with civil service unions. But, in a fresh consultation published earlier this year, the Cabinet Office said it believed that deal was “not fully delivering against its aims” and was encouraging staff facing redundancy “to hold on in the expectation of better terms later”.

The government is therefore mulling a substantial cut in the tariff used to calculate exit payouts for all three forms of early departure from the civil service – voluntary exits, voluntary redundancies and voluntary redundancies – as well as bringing an end to, or reducing, employer-funded early access to pensions for staff reaching the end of their careers.

Cabinet Office mulls further cuts to exit pay and axing of early pension access in Compensation Scheme overhaul
FDA union's Dave Penman: Plans to tear up the deal on civil service redundancy terms will undermine trust between politicians and public servants
Tackle surge in consultancy spend with better workforce planning, PAC tells departments

It argues that the package of reforms will save “just over a third” on the current costs of exits, and will help leaders to better manage their organisation.

However, in its formal submission to the Cabinet Office consultation, Prospect – whose members include specialists working in the civil service – says it is "extremely concerned" about the proposals and warns that they could prompt "significant industrial relations problems arising across the civil service".

The submission says: "Coming, as they do, after significant job cuts, office and site closures, long-term pay restraint and pension changes; the proposed cuts to redundancy compensation seem to open another front in a sustained attack on civil servants' terms and conditions

"The proposals show particular disdain for the many thousands of staff currently at risk of redundancy. Prospect members voted to accept reforms to the CSCS agreed with a Conservative minister only five years ago and will be particularly aggrieved by these proposals to renege on that agreement so soon after it was entered into."

Prospect: workforce management will be "significantly impaired"

The union argues that the ability of managers to use redundancy packages to help them sensibly oversee reductions in their workforce will be "significantly impaired" should the plans go ahead, and says that the current terms "have enabled civil service and related employers to efficiently deliver headcount reductions as well as refreshing management structures and skills bases".

It also disputes the Cabinet Office's claims that the relative generosity of voluntary redundancy terms means that “staff generally will not come forwards for voluntary exit schemes unless they were already minded to leave”.

Voluntary exit terms are offered by employers looking to reduce the size of their workforce, but are optional for staff, while voluntary redundancy terms are used when jobs are already at-risk and talks with unions are ongoing. The Cabinet Office document says “well over” 90% of voluntary exit schemes are on the same terms as those under voluntary redundancy and says it is minded to widen the gap between the two schemes to incentivise people to leave earlier on in the process.

But Prospect says the government has made that assertion "without any supporting evidence", adding: "Prospect’s experience is that voluntary exit terms are used extensively across the civil service. Use of voluntary redundancy terms will often be dictated by the circumstances and not as a consequence of staff holding off from applying for redundancy in the expectation of better terms later."

The union also launches a defence of early access to pensions, arguing that this was a "deliberate and important feature" of the deal struck in 2010.

"Use of voluntary redundancy terms will often be dictated by the circumstances and not as a consequence of staff holding off from applying for redundancy in the expectation of better terms later"

Under the current scheme, long-serving staff approaching pension age are able to leave the workforce and claim an unreduced pension, in recognition of the fact that some will be unable to find new work. But the Cabinet Office is considering scrapping this access completely, saying it is "concerned that these provisions do not now appropriately reflect the ability of staff to draw their pensions, nor the growing reality of the length of working lives”.

Prospect, however, says unreduced pension access allows employers "to target exit schemes in a way that refreshes management structures and skills bases", and says the scheme currently offers "appropriate compensation for redundancy at an age when it is more difficult to retrain and find equivalent employment elsewhere".

It also points out that unreduced pension access "is offered by many similar organisations in the private sector".

Instead of the measures floated by the Cabinet Office, Prospect urges the government to focus on improving Whitehall's workforce planning, a move it says would deliver savings by cutting the amount departments spending on consultants and temporary staff. A recent report by MPs on the Public Accounts Committee highlighted that spend on outside help was once again on the rise in spite of progress made since the introduction of tight spending controls in 2010. 

"Prospect has ample experience of members being made redundant from the civil service and later returning (often to the same employer) either as employees or contractors," the union says.

"In some cases repayment provisions within the CSCS or wider regulations will reduce the direct cost in the form of exit payments but the entire process is wasteful and in many cases it is much more expensive to retain the skills through a contractor (skills that the civil service has often paid for through the training it originally provided anyway)."

And it adds: "Better workforce planning clearly offers significant opportunities to reduce the cost of exits from the civil service. Just because improving workforce planning is more difficult than changing the tariff in the CSCS does not mean it is not important to implement it."

The Cabinet Office's consultation – and a wider Treasury exercise looking at exit terms for the public sector workforce – has now closed for submissions. Prospect, whose members rarely resort to industrial action, has called for further talks with the government on the proposed measures, and has said it will ballot members on any changes. 

The proposals have already drawn fire from the FDA and PCS unions.

Share this page
Read next