The government has recently begun pushing ahead with significant changes to the money and pensions that public-sector workers, especially those at councils, are allowed to receive when leaving their jobs, even if being made redundant through no fault of their own. Despite what you may have heard in the media, it doesn’t only affect the ‘fat cats’ at the top.
Exit pay cap
The first part of the changes is known as the public sector ‘exit pay cap’ and was rushed into effect over the course of just a few weeks in October and November this year. This sets a £95,000 limit on the money that can be spent on someone leaving a public-sector job, which sounds like it would only affect very well paid staff but in fact can hit some staff with salaries even in the £20,000-£30,000 range if they have been loyal public servants for a number of years.
For all their working lives, staff with local government pensions have known that if they are made redundant aged 55+, they would be entitled to claim their pension early, unreduced, as well as getting their contractual redundancy pay. In the space of just a few weeks, this changed for anyone whose contractual redundancy pay plus the amount the employer had to pay into the pension to keep it unreduced totalled over £95,000 – suddenly, despite all the feedback from everyone who could see how unfair this instant change was, this became illegal on 4 November 2020.
So little notice was given of this that many people up and down the country, who had worked hard for councils all their lives, and had already agreed to take redundancy and signed all the paperwork, suddenly found the retirements they were counting down to had been ripped out from under them by sheer inexcusable government spite.
And it gets worse: a further reform of the Local Government Pension Scheme is now in progress. Rather than simply bringing this in line with the £95,000 cap requirement, the reform goes further and bans scheme members from taking both an unreduced early pension and a contractual redundancy payment, even if the cost to the council of offering both does not exceed the £95,000 cap. No confirmed date is attached to this but we anticipate it will be implemented in early 2021.
More haste, less clarity
The government has rushed all this legislation through extremely quickly, prioritising punishing public-sector workers in a year when we have all gone above and beyond to support our communities.
Because of all the rushing, they haven’t even got their own paperwork in order enough to be able to explain properly what the specific impact of these changes will be for local government workers.
The result has been that employers such as LB Bexley have been making staff redundant but have been unable to explain to those staff exactly what their financial position will be by the time their notice period ends.
UNISON is encouraging employers to protest about the position the government has put them in by raising all cases where staff are set to lose out as a result of the sudden changes through the ‘waiver’ process which goes all the way to the government minister responsible. Bexley have not yet agreed to do this but we will continue to argue that our members deserve better than this disgraceful treatment by a cruel and spiteful government.