Government HR chiefs will be forced to delay an expected jobs cull across Whitehall until drastic cuts in Civil Service severance pay are imposed, making the redundancies far cheaper, according to experts.
Last week, prime minister Gordon Brown announced the Civil Service Compensation Scheme (CSCS) would be slashed from as much as three years’ pay to as little as 24 weeks by August, to save £500m over three years and align payouts to the private sector.
The news comes just weeks before chancellor Alistair Darling is expected to announce thousands of job cuts across the Civil Service as part of this month’s Budget, due on 22 April.
Michael Delaney, partner at law firm Matthew Arnold & Baldwin, said it was “absolutely” the case that the government was rushing through the severance pay changes now to make redundancies less costly. “The job cuts will come in the Autumn,” he said.
“If there is a variation to terms now, the payment of enhanced redundancy terms will fall away. That seems to be the driver.”
He added the changes were a political decision aimed at easing tensions caused by the disparity of public and private sector pay and benefits. Unions may be forced to agree to the changes as they could prevent further job losses, he said, although there would be a huge backlash among members when they are eventually balloted on the decision.
Unions told Personnel Today they have been locked in negotiations for six months with government, fighting for “fair treatment” for staff.
But Dave Penman, head of operations at the FDA, which represents senior staff, admitted: “The announcement came as a surprise. We’re still in the middle of those discussions.”
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Lucy Parsons, senior economics researcher at think-tank Reform, insisted the news was positive for employers. “[The new package] will give managers more freedom to make redundancies when they feel it’s necessary because it will be less costly.”
The Cabinet Office refused to comment until union negotiations were completed.
