Councils must cap ‘golden goodbyes’

A £95,000 cap on “golden goodbyes” in the public sector will be introduced to stop huge exit payments, the Government has announced.

Local councils will be banned from handing out six-figure payouts as part of a new clampdown announced today.

More than 1,600 public sector employees received payouts exceeding £100,000 in 2016-17, at a cost of £198 million to the taxpayer.

Local government “golden goodbyes” accounted for almost half of this amount. Exit payments across the public sector amounted to £1.2billion in 2016-17, according to the Treasury.

Writing in The Daily Telegraph, Liz Truss, the Chief Secretary to the Treasury, said: “Every year, more than 1,600 highly paid workers such as council chief executives get six-figure golden goodbyes – all from the taxpayers’ pocket. Public servants should be fairly paid, but in total, these massive payoffs cost over £1billion.

“We cannot justify these sums when we’re prioritising spending on things the public actually wants, like schools, hospitals and front-line police.”

The Government has launched a consultation outlining how it will introduce the £95,000 cap. The Civil Service, local government, police forces, schools and the NHS will be included in a first round of implementation which will cover the vast majority of public-sector workers.

It comes as more than 2,400 council employees received total remuneration packages of more than £100,000 in 2017-18, according to a report this week by the Taxpayers’ Alliance.

Its “town hall rich list” showed the highest-earning official received a pay package of nearly £600,000 in 2017, despite the council pleading for more money for services. Roger Parkin, interim chief executive at Slough borough council, received a £112,959 salary in 2017, £339,903 in pension payments and more than £140,000 in compensation when he left the post.

Meanwhile, Northumberland council paid its outgoing chief executive a severance payment of £369,999, and a “managing director for delivery” at Wirral council received a package of £569,423, which included a severance payment of nearly £100,000.

Ms Truss said “massive” public sector payoffs “incense” the public. “These six-figure payoffs for senior public sector workers … weren’t right,” she said.

John O’connell, chief executive of the Taxpayers’ Alliance, said the £95,000 cap meant “taxpayers will be breathing a sigh of relief. For too long, hard-pressed families have been footing the bill for overly generous payouts for the public sector top brass.

“The average council tax bill has gone up by more than £900 and the tax burden is at a 49-year high, so this announcement is an important step in the right direction.”