The battle over civil servants' pay-offs: Round 2

Just two months ago the Public and Commercial Services Union (PCS) was riding high on its win in the High Court, which ruled the previous government acted unlawfully when it introduced a new redundancy scheme. Labour attempted to draw up plans to cut £500 million a year from the Civil Service Compensation Scheme (CSCS) by capping many pay-offs. The court ruled that under existing laws, changes in the scheme could not be made without union consent.

So Ministers will meet with the unions later to “head off” strike threats over changes to public sector redundancy terms. But there is a sense of inevitability that the coalition government and the unions will eventually come to blows over redundancy reform.

The coalition’s plans of CSCS reform were clear from the outset and it was reiterated today when a spokesman said "As outlined in the coalition agreement, we are looking at ways to reform the CSCS to bring it more into line with good practice in the private sector."

Reform of the CSCS is very much needed as under existing rules, some civil servants are entitled to severance payouts worth as much as six years’ salary. Last year, it emerged that 15,000 civil servants had been made redundant over three years, receiving almost £1 billion in severance payments. The average payout was £60,000 but some public servants received as much as £100,000. Indeed the redundancy scheme is so expensive that many ministries have pools of thousands of employees who do not have allocated work but are not sacked because it is too expensive.

Now that the coalition has begun to make essential cuts in public spending to try and control the deficit there will inevitably be job losses in the civil service. However any potential savings risk being cancelled out if civil servants are given massive golden goodbyes.   

But the unions seem adamant that severance pay should not be cut. Mark Serwotka, the general secretary of the PCS, said “They will face resistance the like of which we haven’t seen in this country for decades. We will see not just co-ordinated industrial action by unions but campaigns in every community.”

Thankfully the government seems set to bring the CSCS in line with the private sector, despite the aggressive talk of union bosses. Plans are even in place to amend the law, which stipulates union consent is needed to amend the CSCS so that essential changes can be made. This is a good move by the government and will help deliver better value for taxpayers.   


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