George Osborne "seeking fresh curbs to civil service redundancy pay"

Amid reports chancellor looking to cut voluntary civil service redundancy payouts by a further six months – a move first floated in 2010 – unions warn of "war by the government against its own staff"

By matt.foster

02 Dec 2015

Unions have reacted with anger to a report that George Osborne is looking to cut redundancy payouts for civil servants, a move which could reopen a deal on pay and terms agreed in the last parliament.

Citing a Treasury source, The Times said on Wednesday that the chancellor wants to reduce the maximum payment for voluntary redundancy across the public sector workforce to 15 months' salary, down from the current 21 months.

The 21-month limit on voluntary exit payouts was only agreed after extensive talks with unions in 2010, with the Cabinet Office initially consulting on reducing voluntary payouts to 15 months. Civil servants subject to compulsory redundancy are entitled to 12 months' pay. 

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A Treasury spokesperson told the paper: "There are savings to be made and we will do all we can to rein in excess where we find it, including bringing pay and perks at the top end of the public services under control. We will consult on further action to reduce the costs of redundancy payouts."

Unions have reacted with anger to the report, with FDA general secretary Dave Penman telling CSW that any move to reduce voluntary exit terms would go against the spirit of the 2010 deal which was agreed with unions including FDA, Prospect, GMB, Unite, and the POA.

"At some point, the government will discover that you can't simply continue to attack the pay and conditions of civil servants without consequences," he said.

"As recently as this week, civil service chief executive John Manzoni and minister for the Cabinet Office Matt Hancock admitted to MPs that new pay arrangements were needed for the increasing numbers of civil service specialists.

"The FDA negotiated and agreed these terms with the government and Conservative minister Francis Maude as recently as 2010, who at the time described them as sustainable 'in the longer term' – the government’s definitions are clearly different to ours. Any additional changes can only serve to further erode morale.

"With pay levels rising in the private sector and comparable pay at its lowest level for more than 20 years, the government needs to understand that a coherent strategy is necessary to motivate, recruit and reward the very public servants they are relying upon to deliver the spending cuts announced by the chancellor last week."

Garry Graham, deputy general secretary of the Prospect union, said many officials would view the proposed change as "a declaration of war by the government against its own staff​" ahead of a "tsunami of public sector job cuts".

"In 2010 Francis Maude described the deal reached with Prospect and four other unions as not only fair but ‘affordable and sustainable’," he told CSW. "This was said at the nadir of the financial crisis. The question is: what has changed? There is growing evidence that reward packages available in the civil service are lagging ever further behind those in the private sector."

The Public and Commercial Services union, which opposed the 2010 deal, also condemned the move.

"It sickens civil servants to be told by Tories that their lives are cushy, when their pay, pensions and conditions have all been slashed," a spokesperson told The Times.

'Targeted reforms'

Last week's Spending Review saw the Treasury promise to look again at several aspects of public sector pay and terms, with the document saying ministers would consult on "further cross-public sector action on exit payment terms" – and promising "targeted reforms in areas where the public sector still has far more generous rights than the private sector". CSW is awaiting comment from the Treasury on the planned timescale for the consultation.

The Spending Review also promised to review sickness absence terms in the public sector, again arguing that these were "more generous than typical private sector arrangements" and saying the Treasury would consider legislation "where necessary".

Since the election, Osborne has also pledged to impose a £95,000 cap on severance pay-outs for public sector workers, a move unions warn will hit long-serving staff on relatively modest incomes because of the inclusion of early access to unreduced pensions and non-financial benefits such as extra annual leave.

The Office for Budget Responsibility last week predicted that, on the basis of the spending cuts outlined at the Spending Review, 100,000 public sector jobs were likely to be cut between now and 2019-20.

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