PCS condemns cuts to the civil service compensation scheme

11 March 2016

Our national executive has made decisions on campaigning against the governmentÂ’s proposed cuts to the civil service compensation scheme, including lobbying MPs.

The Treasury has launched a "consultation on reforms to public sector exit payments" and the Cabinet Office has followed this with a "consultation on reform of the civil service compensation scheme."

The current civil service redundancy scheme was introduced in December 2010. The terms were described by the then Cabinet Office minister Francis Maude, as "fair, affordable and sustainable; they offer protection to the lowest paid and those nearing retirement, and put a cap on the total amount which can be paid out to any one individual.”

Yet after only 5 years, the government is seeking to make further cuts to redundancy pay to, which will affect every civil servant facing redundancy, and introduce a lower cap on the total amount which can be paid out to an individual to £95,000.

The government is proposing to make huge cuts to departmental budgets over the next 4 years. Cutting redundancy pay is simply an attempt to make those cuts cheaper.

The government's plans pay no regard to the hard work and loyalty shown by civil servants, who have, in the last 5 years, seen:

  • 86,000 jobs cut
  • a pay freeze and cap
  • cuts to pensions. 

Proposed changes

The consultation on the civil service compensation scheme outlines the Cabinet Office’s objectives. It proposes structural changes to reduce costs, including potentially changing how the amount is calculated or reducing the maximum payable.

Options for improving the use of flexible terms, include potential:

  • Removal of the requirement to make a voluntary redundancy offer before moving to compulsory redundancy
  • Reduction of the cap for voluntary exit to 18 months
  • Reduction of the cap for voluntary redundancy to 12 months
  • Reduction of the cap for compulsory redundancy to 9 months.

Changes to employer-funded early access to pension, include:

  • potential removal of the employer funded top up
  • potential increase of the minimum age to within five years of state pension age
  • An absolute cap on compensation payments, in line with the government’s proposed legislative changes that will cap payments at £95,000.

Read the full consultation document on the gov.uk website. The consultation closes on 4 May and we will be making a submission on behalf of members.

Negotiations with the Cabinet Office

We met with the Cabinet Office on 11 February. At the meeting we signalled our opposition to further cuts to redundancy pay. We pressed the Cabinet Office for the evidence-based rationale for the changes being proposed and for a range of data to enable proper negotiations to take place. 

The Cabinet Office indicated that they are seeking to reach agreement in negotiations, but that if agreement cannot be reached they will look to introduce changes to the redundancy scheme through legislation.


The NEC has this week agreed a campaign plan, including proposals that we will:

  • Brief our parliamentary group to raise this issue through every political channel
  • Lobby the Labour party to ask them to oppose the changes
  • Organise constituency-based lobbying of MPs, linking the cuts in redundancy provision to the issue of office closures
  • Lobby the devolved administrations to support our position
  • Organise a petition against the government's proposals to cut civil service redundancy pay 
  • Approach the Cabinet Office for facilities for members’ meetings
  • Encourage members to respond to the consultation
  • Publicise our position in members' and branch briefings, emails to members, through the PCS website, and the union's journals.

Potential industrial action

The NEC agreed to convene a meeting of senior lay pepresentatives across the union to explore the possibility of a programme of industrial action should negotiations not produce an acceptable outcome.

Members' meetings

The NEC also agreed to urge branches to hold members’ meetings to build support for the campaign, also using them as recruitment and organising events. Branches will be contacted shortly with further details.


Our annual delegate conference from 24-26 May follows shortly after the closure of the consultation. This will provide an opportunity for the union to take stock of progress made through negotiations and campaigning and to democratically determine the next steps in the campaign.

PCS reps can read a full branch briefing about the scheme on our document library.


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