Redundancy pay for civil servants slashed

By JASON GROVES, POLITICAL EDITOR
Updated: 06:21 EST, 7 July 2010

Gold-plated redundancy payments to civil servants are to be slashed by up to 85%, as ministers prepare for a wave of job cuts in the public sector.

In a move which prompted union fury, Cabinet Office Minister Francis Maude announced that redundancy terms for Britain's 500,000 civil servants are to be cut from a maximum of six years and eight months to a maximum of one year.

Mr Maude said the existing scheme was 'hugely out of kilter' with deals in the private sector and 'simply untenable' at a time of spending restraint.

He said ministers would bring forward legislation to impose the new terms and conditions on civil servants. The Bill will also amend a 1972 law that meant changes in conditions could only be implemented with union approval.

Mr Maude also pledged to shake up generous rules on sick pay which are blamed for high rates of sick leave in the civil service.

But, in an apparent bid to prevent further confrontation with the unions, Mr Maude dropped an expected mention of longterm plans to smash the system of national pay bargaining which gives unions much of their strength.

Yesterday's announcement comes as ministers draw up plans for cuts in public spending which are forecast to lead to 600,000 job losses in the public sector.

Last year it emerged that 15,000 civil servants had been made redundant over the previous three years, pocketing almost £1bn in payoffs. The average payout was almost £60,000 - but some civil servants are believed to have qualified for six-figure sums.

Government sources said without the changes to redundancy terms, cuts to public services would have to be even deeper. A source said the changes would also end the extraordinary position where hundreds of civil servants are kept on the public payroll after their jobs have been abolished because it is too expensive to sack them.

More than 1,700 are pocketing an estimated £50m a year in 'ghost jobs' while they await deployment to another task.

The cut in redundancy terms goes significantly further than an attempt by Labour to cap payoffs for civil servants at two years' salary. This was defeated in the courts earlier this year following legal action by the PCS union.

Mark Serwotka, general secretary of the union, yesterday warned that the Government move would provoke strike action by hundreds of thousands of civil servants. He accused Mr Maude of 'breathtaking arrogance and a contempt for his own workforce'.

He added: 'There will inevitably be industrial action if jobs are cut, pay is frozen, pensions are cut and our contractual terms are ripped up.

'The majority of people affected are low-paid staff who are being asked to pay a terrible price for a crisis that was not of their doing.'

Dai Hudd, deputy general secretary of the Prospect union, which represents 120,000 civil servants, accused Mr Maude of 'bully boy tactics'.

But the PCS was facing a backlash from some other unions, who believe the legal action backfired and wrecked chances of agreement on a two-year cap. Mr Maude said the move 'might not have been necessary' had the PCS been willing to compromise.

Jonathan Baume, of the First Division Association, which represents senior civil servants, said he 'regretted' the refusal of the PCS to sign up to the original deal offered by Labour, which he said would have left most workers unaffected.