Stampede to beat the cap on lavish payoffs

Stampede to beat the cap on lavish payoffs

A public sector pay cap on golden goodbyes caused a ‘stampede’ of workers keen to leave on six-figure payouts before it came into effect.

More than 1,000 staff in government departments and quangos received exit payments above the £95,000 limit before it was finally imposed this month.

The cap was introduced after a Daily Mail and TaxPayers’ Alliance investigation brought the issue to light five years ago.

The Mail revealed how fat-cat bosses were being paid fortunes to walk away from their jobs – often after a record of failure.

A public sector pay cap on golden goodbyes caused a 'stampede' of workers keen to leave on six-figure payouts before it came into effect

A public sector pay cap on golden goodbyes caused a ‘stampede’ of workers keen to leave on six-figure payouts before it came into effect

Yet it took until November 4 for the cap to be implemented – allowing public officials to leave on huge sums in the intervening years.

Last night, Tory MP Andrew Bridgen told the Mail: ‘What we saw among the public sector was a stampede to get out the door before the pay cap came in. Many of these huge taxpayer-funded payoffs look more like lottery wins rather than fair compensation for leaving their job.’

More than 1,000 public officials took home £95,000 or more between 2015 and the beginning of this year, according to The Times. Some redundancy packages reached almost £500,000 and at least 66 were worth £200,000 or more.

These included a Network Rail boss given an exit payment of more than £250,000 and two employees at Public Health England awarded more than £200,000.

At the Department for Education, four people walked away with £400,000 each, while an official at the Ministry of Defence was handed a tax-free exit payment of £289,000.

This year some of the country’s most senior mandarins were among those cashing in on exit payments.

Cabinet Secretary Sir Mark Sedwill (pictured) received a payout of £248,189 when he left in September – two months before the cap came in

Cabinet Secretary Sir Mark Sedwill (pictured) received a payout of £248,189 when he left in September – two months before the cap came in

Claire Moriarty landed a redundancy payment of more than £300,000 after 35 years’ service rising to the rank of Permanent Secretary, most recently at the Department for Exiting the EU. This was on top of her £180,000 salary, a £20,000 bonus, and £137,000 added to her pension pot.

Cabinet Secretary Sir Mark Sedwill received a payout of £248,189 when he left in September – two months before the cap came in.

It was a similar story at English councils, which spent more than £220million on thousands of departing staff in the 2019/20 financial year.

Analysis found 100 officials walked away with packages worth more than £100,000 – and a further 30 received more than £250,000 each. One official in Dorset took home almost £1million.

The Treasury declined to comment on the findings, but said exit payments provided an important source of support for individuals as they found new employment or as a bridge until they reached retirement age.

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