A new £12bn national infrastructure bank was announced by chancellor Rishi Sunak in a Budget billed as being pro-business but offering little for public services.
Mr Sunak announced a series of measures to help the national economy bounce back, including £1bn for town deals, and the locations of eight freeports.
He also announced a further business rates holiday, for which councils will be compensated.
And there was extra support for towns, with £1bn for 45 new town deals, and the National Infrastructure Fund being asked to produce a report on how infrastructure can best support economic prosperity and quality of life in towns, focusing on transport and digital infrastructure in particular.
The government’s declared intention to revoke the £95,000 cap on exit payments on public sector authorities may not spell the end for the controversial policy, lawyers and finance experts have cautioned.
Meanwhile, some of those caught by the cap imposed in November now face having to wade through a mountain of red tape to get back the money owed to them.
On Friday afternoon, the Treasury announced it would revoke the exit cap regulations, admitting they had unintended consequences . The announcement is understood to have come out of the blue to the legal teams opposing the policy.
However, the judicial review brought by Lawyers in Local Government (LLG) and the Association of Local Authority Chief Executives (Alace), and another brought by the union Unison, are currently still set to go ahead next month. Conversations are understood to be continuing between the appellants over whether to withdraw. One source familiar with the proceedings said there was uncertainty over whethe
Treasury scraps cap on public sector exit payments
The Government has dropped its controversial cap on public sector exit payments after admitting it had ‘unintended consequences’.
A limit of £95,000 on payments to council staff leaving their jobs came into force in November in the face of fierce opposition from unions.
The High Court was due to hear a joint legal challenge by Lawyers in Local Government (LLG) and the Association of Local Authority Chief Executives (ALACE) and a second case brought by Unison next month.
But today the Treasury issued new guidance revoking the pay cap following an ‘extensive review’ that ‘concluded that the cap may have had unintended consequences’.
UK abandons redundancy cap following legal challenges
By Elaine Knutt on 15/02/2021
Professionals leaving Whitehall and other public sector roles will no longer have exit payments capped at £95,000. Credit: Chris Jones/Flickr
The UK government has repealed new regulations that limited exit payments for departing public sector staff to £95,000 (US$132,000), after its policy was challenged in the courts by unions and staff representative bodies.
Last November, the Restriction of Public Sector Exit Payments Regulations 2020 introduced a limit on redundancy and early retirement payments. But late last week, the Treasury issued guidance for public sector employers and staff stating that the £95,000 cap should no longer be applied and that regulations will be revoked. “After extensive review of the application of the Cap, the Government has concluded that the Cap may have had unintended consequences and the Regulations should be revoked,” it said.