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The government has cancelled the public sector exit payments legislation that was introduced on 4 November 2020 as it decided that it may have had unintended consequences. Please continue to process any leavers as you did before the regulations came into force. You must not make a cash alternative payment for any redundancy or business efficiency exits that take place on or after 12 February 2021.

HM Treasury has issued guidance on the directions. Their expectation is that employers should pay the additional sums that would have been paid had the cap not been applied for employees who left between 4 November 2020 and 12 February 2021. You can find out more information on the exit cap on the LGPS website for employers. We’re currently seeking further guidance and will update you as soon as we can.

The Government remains committed to tackling unjustified exit payments and will bring forward proposals to do this shortly. It is likely that the exit cap could be introduced again later this year.

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Consultation on reforming local government exit pay bulletin

Policy and strategy consultation

Funding Strategy Statement Consultation

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Employer newsletters and bulletins

Employer newsletter – issue 13