Superannuation Bill

Memorandum submitted by David Gayther (SU 06)

1. Introduction:    I write as a civil servant in a private capacity, directly affected by this Bill.  I work for the Skills Funding Agency, which is an Executive Agency of the Department for Business, Innovation and Skills.  It is a new Agency established on 1 April 2010, and has already accepted voluntary severance requests this month from 272 of its total workforce of about 1800 staff.  The current Chief Executive, Geoff Russell, envisages a radically smaller organisation less than half its current size in the 'near future' so it is clear there will be far more job cuts to come.  The changes affect all its staff.

2. Summary:   My suggestion is that the Bill is refocused so that maximum payments are capped in cash terms, rather than, or in prior i ty to , time-terms.  This would be fairer to lower paid workers, as well as having the advantage of making similar, or possibly even more substantial saving s .

3 . Detail:   The current proposals with a cap of 1 year for those under compulsory dismissal unduly penalise the lower paid who will already be on rela ti vely low pensions.  My proposal is that the cap should be first determined by way of a cash ceiling, with no civil servant getting, say, more than £100,000, to £150,000 as a compensation payment. This would also deal with Francis Maude’s particular concern about the cost of getting rid of those more highly paid civil servants.

I am convinced that if such a financial cap was used, together with a more staged and gradual reduction to the existing three year maximum payout, that the same savings, or even greater savings could be made.  Such an amendment would not only be fairer on the lower-paid, but would be strongly in line with current cross-party thinking on the need to cap high public sector salaries and pensions.  I therefore urge the Committee to develop a revised methodology that calculates the maximum severance on the basis of a cash ceiling, supported by maximum term payouts.  This would mean for example, that lower paid civil servants could receive, under this model, up to 2 years' pay provided they qualify, and provided the cash payout was less than a certain amount as indicated above.

4. Conclusion:   Not only would this be fairer on the low paid , and more equitable overall on all those being asked to leave , but, if saving money is the prime purpose of this bill, then the same or greater impact in these terms can still be had.  

5. Other point: Finally I ask the Committee to recognise the unfair way in which the need for this Bill has been blamed on the one civil service union who obstructed the previous government’s attempts to reform the redundancy scheme. That union (the PCS) has a duty to protect its paying members’ principal employment interests as a non-political, members’ organisation. It seems therefore not only unfair, but somewhat vindictive to blame them for just doing their job.

Sept ember 2010