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Government wants bargain basement job cuts

31 July 2009

Plans announced today by the government to radically reduce the compensation paid to civil servants being made redundant are an outrageous attempt to cut jobs on the cheap, the Public and Commercial Services union says.

Proposals published by the Cabinet Office for what it describes as “reform” of the civil service compensation scheme represent a cut in contractual rights to decent redundancy compensation at a time when jobs are at risk.

They would mean a huge financial loss amounting to tens of thousands of pounds for the vast majority of existing staff, particularly those facing compulsory or voluntary redundancy.

PCS, with the other civil service unions, has been in negotiations with the Cabinet Office about the scheme since last autumn but these new plans have not been agreed with the unions.

The union will be seeking a further meeting with Cabinet Office ministers. We have received detailed and positive legal advice and are considering applying for a judicial review to halt the process.

Proposals for the compensation scheme will be considered at an emergency meeting of the union’s national executive on 6 August and subject to full consultation among PCS members.

PCS general secretary Mark Serwotka said: “These proposals are a disgraceful attempt by the government to replace a fair, negotiated right to decent compensation with a bargain basement pay-off at a time of massive insecurity over jobs.

“With both of the main parties, backed by the head of the civil service Gus O’Donnell, talking about slashing public spending, tens of thousands of PCS members are worried about their futures and their livelihoods. Instead of addressing these genuine concerns, the government has piled further pressure and anxiety on its own workforce.

“Away from the headlines about bumper pay-outs for mandarins, the vast majority of civil servants live in the real world where pay is low and pensions are far from gold-plated. The real divide is not between public and private, but between low-paid workers and the very wealthy.”

Full details of the proposals for reform of the Civil Service Compensation Scheme are available on the civil service website.

Facts about civil service pay and pensions:

  • More than 100,000 civil servants, almost 20% of the workforce, are paid less than £15,000 a year
  • Nearly half earn less than £20,000 a year and over 50% earn less than the national average UK salary which is over £23,000
  • In 2007/8 the average civil service pension was £6,500. For dependents this was £2,900
  • Excluding high earners, the average was £4,200
  • The average civil servant accesses their pension at roughly the same time as everyone else – 62/63 years of age
  • More than 40,000 pensioners receive a civil service pension of less than £1,000 a year
  • Almost 61,000 pensioners receive a gross pension of between £1,000 and £2,000 a year
  • The average length of service for the majority of civil servants is 15 years.

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