Substantial
reforms to the Civil Service Compensation Scheme (CSCS) will save
up to £500 million over the next three years without impacting on
the very lowest-paid civil servants.
The scheme sets out how much compensation should be given to
staff who are made redundant or who volunteer to leave under an
early exit programme.
Under the new rules announced today by Minister for the Cabinet
Office, Tessa Jowell, a new maximum severance payment limit will
be imposed for all Civil Servants, all departments will be
required to follow the same rules on redundancy payments (with
some flexibility to set compensation payable in other
circumstances) and the minimum qualifying period for redundancy
payments will be increased.
Tessa Jowell said the reforms, which will come into effect from 1
April 2010, represented a fair package:
"The existing compensation scheme has been in place
since 1987 and isn't appropriate for the modern Civil
Service. Today's changes will help ensure the Civil
Service delivers the £500 million efficiency savings that the
Prime Minister announced earlier this year, while protecting the
lowest-paid civil servants. The changes will also bring the scheme
in line with age discrimination reforms and similar offers across
the public sector."
The Cabinet Office published its original plan for reforming the
CSCS in July. Following consultation, several amendments have been
made to the proposals, including providing extra protection for
the lowest-paid civil servants.
Key features of the reforms:
* Anyone made compulsorily redundant will receive cash
compensation of up to two years' pay. For the lowest
paid, cash payments will be capped at three years' pay or
£50,000, whichever is lower. This protects the 60 per cent of
civil servants that earn less than £25,000 a year.
* Anyone who receives a severance payment and then returns to
work for the Civil Service will have to pay back their cash
settlement on a pro-rata basis. In the future, the Civil Service
will explore the feasibility of extending this policy to include
anyone to returns to work as a consultant for the Civil Service.
* The minimum qualifying period for a redundancy payment will be
increased from one to two years.
The new compensation scheme will have no effect on existing civil
service pension schemes.
The changes announced today to the Civil Service Compensation
Scheme are the outcome of a consultation process that began in
July, and are part of the ongoing modernisation of the Civil
Service. On Monday, the Government will publish, Putting the
Frontline First: Smarter Government, which will set out a wider
range of policies to improve public services.
Notes to editors
1. On 31 March 2009 the Prime Minister announced his commitment
to cut the cost of the Civil Service.
2. On 31 July 2009, the Cabinet Office published the original
proposals for reform of the Civil Service Compensation Scheme in
the document, Fairness for All. The proposal document was issued
to the Civil Service trades unions and to other interested parties
and was also made available through the Civil Service website.
Comments were invited on the proposals, to be submitted to the
Cabinet Office by 5 October 2009.
3. The Civil Service will continue to regard compulsory
redundancy as a last resort, to be used only where redeployment is
not feasible.
4. Full details of the reforms can be found at: www.civilservice.gov.uk/my-civil-service/pensions
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