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The below Parliamentary question was asked by Kevin Brennan on 2016-01-28.

To ask Mr Chancellor of the Exchequer, if he will make it his policy that the right of local authorities to have a waiver option on public sector exit payments should be included on the face of the Enterprise Bill.

Greg Hands

The Government consulted on implementing a public sector exit payment cap in July 2015. The Government response to this consultation was published on 16 September 2015. This response provides detail on which organisations and types of payments the Government intends to capture within the scope of the public sector exit payment cap. This accords with the Government’s manifesto commitment to end tax payer funded six figure payoffs for public sector workers.

The response document can be found at the following link: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/464367/Public_sector_exit_payments_response.pdf

The exit payment cap will apply to payments made as a result of an employee leaving their employment. It will not affect any pension a person has earned through their years of service or have any impact on accrued pension rights or pension lump sum entitlements on retirement. It will capture contributions, made by the employer, to fund early access to an unreduced or partially reduced pension. This is because such costs are ultimately funded by the tax payer.

The Government has been clear that early retirements relating to ill health are outside the scope of the cap and will not be affected. Additionally, any payments directed by a Court or Tribunal will not be included in the scope of the cap.

Exits on compassionate grounds are not such a clearly defined concept as exits related to ill health or redundancy. There will generally be a large degree of employer discretion on the terms of such exits, and on any payments. In these cases there will be discretion available to relax the cap in individual cases, subject to relevant Ministerial or local council approval, as will be set out in further detail in forthcoming Treasury guidance and directions.

The below Parliamentary question was asked by Kevin Brennan on 2016-01-28.

To ask Mr Chancellor of the Exchequer, whether his Department will agree to Legislative Consent Motions to the devolved government on the issue of public sector exit payments.

Greg Hands

The public sector exit payment cap will come into effect at a date after the Enterprise Bill has received Royal Assent. The Enterprise Bill is currently expected to receive Royal Assent by May 2016. A set of secondary regulations which will give effect to the public sector exit payment cap are currently expected to come into force during autumn 2016.

In the response to the consultation the Government stated that ‘the government would request Legislative Consent Motions from the Devolved Administrations where appropriate, however it would be for the Devolved Administrations to decide the approach they wish to take to this measure.’

On 7 December 2015 the Northern Ireland Assembly declined to agree a Legislative Consent Motion. Subsequently, no provisions relating to Northern Ireland are included in the clauses relating to exit payments.

The below Parliamentary question was asked by Kevin Brennan on 2016-01-28.

To ask Mr Chancellor of the Exchequer, whether any of the devolved administrations have refused to consent to the provisions dealing with public sector exit payments contained within the Enterprise Bill.

Greg Hands

The public sector exit payment cap will come into effect at a date after the Enterprise Bill has received Royal Assent. The Enterprise Bill is currently expected to receive Royal Assent by May 2016. A set of secondary regulations which will give effect to the public sector exit payment cap are currently expected to come into force during autumn 2016.

In the response to the consultation the Government stated that ‘the government would request Legislative Consent Motions from the Devolved Administrations where appropriate, however it would be for the Devolved Administrations to decide the approach they wish to take to this measure.’

On 7 December 2015 the Northern Ireland Assembly declined to agree a Legislative Consent Motion. Subsequently, no provisions relating to Northern Ireland are included in the clauses relating to exit payments.

The below Parliamentary question was asked by Kevin Brennan on 2016-01-28.

To ask Mr Chancellor of the Exchequer, whether tribunal awards made to employees will be included when calculating the proposed exit payments cap for those workers.

Greg Hands

The Government consulted on implementing a public sector exit payment cap in July 2015. The Government response to this consultation was published on 16 September 2015. This response provides detail on which organisations and types of payments the Government intends to capture within the scope of the public sector exit payment cap. This accords with the Government’s manifesto commitment to end tax payer funded six figure payoffs for public sector workers.

The response document can be found at the following link: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/464367/Public_sector_exit_payments_response.pdf

The exit payment cap will apply to payments made as a result of an employee leaving their employment. It will not affect any pension a person has earned through their years of service or have any impact on accrued pension rights or pension lump sum entitlements on retirement. It will capture contributions, made by the employer, to fund early access to an unreduced or partially reduced pension. This is because such costs are ultimately funded by the tax payer.

The Government has been clear that early retirements relating to ill health are outside the scope of the cap and will not be affected. Additionally, any payments directed by a Court or Tribunal will not be included in the scope of the cap.

Exits on compassionate grounds are not such a clearly defined concept as exits related to ill health or redundancy. There will generally be a large degree of employer discretion on the terms of such exits, and on any payments. In these cases there will be discretion available to relax the cap in individual cases, subject to relevant Ministerial or local council approval, as will be set out in further detail in forthcoming Treasury guidance and directions.

The below Parliamentary question was asked by Kevin Brennan on 2016-01-28.

To ask Mr Chancellor of the Exchequer, what assessment he has made of the effect of the proposed public sector exit payments cap on public sector employers’ flexibility to restructure their workforce.

Greg Hands

The Government maintains that £95,000 is a significant amount of money for anyone to be receiving for an exit, while the large majority of exit payments are already significantly below the level of the cap. Voluntary redundancy and workforce restructuring is not contingent upon access to six-figure exit payments. As such, we do not expect the cap to have a widespread impact on the take-up of voluntary redundancy, and believe the cap will enable public sector employers to retain the tools to effectively make organisational changes to their workforce whilst offering those made redundant generous provisions for loss of employment.

The consultation on the public sector exit payment cap ran from 31 July to 27 August 2015, and received over 4000 responses. These responses included representations from public sector organisations. The Government will publish draft regulations and invite comment on them in due course.

The below Parliamentary question was asked by Kevin Brennan on 2016-01-28.

To ask Mr Chancellor of the Exchequer, which public sector organisations will not be covered by the public sector exit payments cap proposed in the Enterprise Bill.

Greg Hands

The Government consulted on implementing a public sector exit payment cap in July 2015. The Government response to this consultation was published on 16 September 2015. This response provides detail on which organisations and types of payments the Government intends to capture within the scope of the public sector exit payment cap. This accords with the Government’s manifesto commitment to end tax payer funded six figure payoffs for public sector workers.

The response document can be found at the following link: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/464367/Public_sector_exit_payments_response.pdf

The exit payment cap will apply to payments made as a result of an employee leaving their employment. It will not affect any pension a person has earned through their years of service or have any impact on accrued pension rights or pension lump sum entitlements on retirement. It will capture contributions, made by the employer, to fund early access to an unreduced or partially reduced pension. This is because such costs are ultimately funded by the tax payer.

The Government has been clear that early retirements relating to ill health are outside the scope of the cap and will not be affected. Additionally, any payments directed by a Court or Tribunal will not be included in the scope of the cap.

Exits on compassionate grounds are not such a clearly defined concept as exits related to ill health or redundancy. There will generally be a large degree of employer discretion on the terms of such exits, and on any payments. In these cases there will be discretion available to relax the cap in individual cases, subject to relevant Ministerial or local council approval, as will be set out in further detail in forthcoming Treasury guidance and directions.

The below Parliamentary question was asked by Kevin Brennan on 2016-01-28.

To ask Mr Chancellor of the Exchequer, if he will make it his policy to implement automatic indexing of the proposed public sector exit payment cap.

Greg Hands

The Government made a manifesto commitment to end six-figure payouts in the public sector and wants to do so as soon as possible. These payments cost around £2 billion a year and it is important that they are fair, proportionate and provide value for money to the taxpayer that funds them. As such, the Government does not see any case for transitional arrangements to delay ending six-figure exit payments. However, the power for Ministers to relax the restrictions imposed by the cap provides the flexibility to do so in appropriate circumstances.

Automatic indexing would fail to offer the flexibility that the clause currently provides for. As it stands, the Government can amend the level of the cap to take into account all prevailing circumstances, and with the additional scrutiny of the affirmative resolution procedure in Parliament.

The below Parliamentary question was asked by Kevin Brennan on 2016-01-28.

To ask Mr Chancellor of the Exchequer, if he will consult public sector organisations which would be affected by the proposed exit payment cap on the technical considerations of that cap.

Greg Hands

The Government maintains that £95,000 is a significant amount of money for anyone to be receiving for an exit, while the large majority of exit payments are already significantly below the level of the cap. Voluntary redundancy and workforce restructuring is not contingent upon access to six-figure exit payments. As such, we do not expect the cap to have a widespread impact on the take-up of voluntary redundancy, and believe the cap will enable public sector employers to retain the tools to effectively make organisational changes to their workforce whilst offering those made redundant generous provisions for loss of employment.

The consultation on the public sector exit payment cap ran from 31 July to 27 August 2015, and received over 4000 responses. These responses included representations from public sector organisations. The Government will publish draft regulations and invite comment on them in due course.