Plan to cut civil servants’ redundancy pay ‘add insult to injury’, says union

The Conservative government has sparked a fresh row with plans to cut civil servants’ redundancy pay while aiming to axe 91,000 Whitehall jobs.

It comes as Tory leadership contender Rishi Sunak has committed to cutting civil service jobs as part of a “shake up” of the “bloated” state that would require senior civil servants to spend a year working outside of Whitehall.

The FDA union – which represents senior civil servants – described Sunak’s proposal as “ill-thought out rhetoric that doesn’t survive the first hour of scrutiny”.

Union leaders are also furious over a Cabinet Office consultation document estimating that proposed changes to redundancy could cut the average exit package by more than a quarter.

Efficiency minister Jacob Rees-Mogg, who claimed the civil service has failed to tackle waste, works on a target of shrinking the civil service by a fifth.

Mark Serwotka, the general secretary of the PCS union, said: “Coming on top of a derisory 2 per cent pay offer and the threat of 91,000 job cuts, these proposed cuts to our members’ redundancy terms add insult to injury.

He added: “It’s clear the government wants to get job cuts done on the cheap. PCS will fight these proposals as we did in 2017, when we successfully persuaded the high court to overturn the government’s previous attempts to rip up our members’ redundancy rights.”

A previous attempt by the government to cut redundancy pay was blocked in the courts in 2017, and unions vowed to fight against the new plans.

The PCS, which represents around 180,000 civil service staff, was already planning to ballot members for strikes over pay, pensions and jobs.

The consultation document says the latest proposal could “create significant savings on the current cost of exits”.

Measures to achieve this include limiting payments to three weeks’ pay per year of service, up to an 18-month cap, and capping compulsory redundancy at nine months’ salary.

A Cabinet Office spokesman added: “In the context of high national debt and increasing cost pressures, it’s vital that all areas of government spending, including the civil service compensation scheme, are affordable as well as fair to both staff and the taxpayer.”

The spokesman added: “Reforming the scheme is a longstanding policy and not connected to headcount reductions. We will continue our close engagement with unions on these proposals.”

The ultimate decision on whether to go ahead with the plans would fall to the next Tory leader and prime minister – either Truss or Sunak.

Both have made commitments to reduce the cost of the civil service, with Sunak freshly committing to reduce jobs in a scathing attack on the “bloated post-Covid state” Monday.

The Sunak campaign said it would “tackle civil service groupthink” and deepen understanding of business by ensuring all senior civil servants spend at least a year of their career outside of Whitehall or in industry before they can receive further promotion.

FDA general secretary Dave Penman said Sunak’s proposals “show he doesn’t understand the basics of how the civil service operates”.

He added: “With Brexit still a work in progress, huge backlogs in public services from the pandemic, a new war on mainland Europe, a cost-of-living crisis, and now a looming recession, the country needs a prime minister who can equip the civil service with the resources and skills it needs.”

Truss was forced to abandon an £8.8 bn plan to reduce pay outside London after critics said it would “level down” the country.