Exit payments can be important to an employee’s ability to adapt to new circumstances and provide vital financial support to individuals as they search for a new job. It is right public servants are given financial security, but this should be in a manner that is fair.
Following a thorough consultation on implementing changes to exit payments, I welcome that the Restriction of Public Sector Exit Payments Regulations will now carry out the legal duty set out in the Small Business Enterprise and Employment Act 2015 to cap exit payments at £95,000 across public sector organisations.
The point has been made that exit payments can often be important to an employee's ability to adapt to new circumstances and provide vital financial support to individuals as they search for a new job. Public servants should be given financial security, but this should only be in a manner that is fair and justifiable. It is also important to note that, where necessary, these regulations can be relaxed to address specific circumstances.
That said, six-figure exit payments are far in excess of those available to most workers in the public sector or wider economy, and I do not believe such payments are proportionate or fair to taxpayers who pay £0.2 billion per year for exit payments exceeding £100,000. That is why I welcome the capping of exit payments in the public sector at £95,000. Even then, I do not expect payments at this level to be the norm.
