Sunday, March 7, 2021
Home News It’s crazy to scrap the cap on fat-cat payoffs

It’s crazy to scrap the cap on fat-cat payoffs

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ON Friday evening, while the majority of the country began winding down for the weekend, the Government quietly slipped out an announcement that it was revoking the £95,000 public sector payout cap.   

Despite the policy becoming law in 2016 and coming into effect only three months ago, the Treasury cited ‘unintended consequences’ as the reason behind the U-turn.   


Since the cap first appeared in its manifesto in 2015, the Conservative Party has been through three Prime Ministers. There’s already been an extensive government consultation on the issue, and it’s been handled directly by three different Treasury Chief Secretaries (including now-Chancellor Rishi Sunak).   

One would have thought Whitehall wonks had plenty of time, and encouragement, to iron out any difficulties. Perhaps they didn’t want to.  


Bigwig bureaucrats and town hall fat-cats have been eating high on the hog for too long. Civil servants banked at least £42million in bonuses last year. They enjoy ultimate job security, and pensions to make any private sector worker green with envy.   

Yet even this one concession to the taxpayer – a single battle to limit the huge six-figure payouts that officials can ride off into the sunset with – has now been rolled back.   


The legislation was supposed to make these golden handshakes history with a £95,000 cap. The profuse payouts, such as the £400,000 given to York Council’s chief executive last year, are insulting to the city’s ratepayers, who have seen their council tax rise by at least 73 per cent since 1997.   

At national level too, chief civil servant Mark Sedwill received a healthy £248,000 after he left Whitehall in June.   

Council bosses, bureaucrats and union barons are laughing all the way to the bank. So it should come as no surprise that the very same group that benefited most are now jumping for joy that the cap on their golden goodbyes has been delayed and overturned.   

Time after time, the cap’s introduction was pushed back or the terms narrowed, with Treasury officials blaming everything from complexity to a lack of parliamentary time.   

It’s meant thousands of Whitehall mandarins have bolted out the door with telephone-number payoffs. Now the rollback will allow thousands more opportunistic officials to do the same.   

The longer this saga drags on, the more vital public funds will be drained through over-generous payoffs. It simply cannot be tolerated at a time like this.  


That’s why the TaxPayers’ Alliance will not sit quietly and allow Whitehall to gum up the process or create enough loopholes that a future cap becomes toothless.   

We’re calling on the Government to reintroduce the golden goodbye cap immediately, not sit around and allow it to die through endless discussion.   

It’s been five years to get it to this stage. We should not, and cannot, start waiting again. Taxpayers can’t afford it.  

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Danielle Boxall
Danielle is media campaign manager at the TaxPayers’ Alliance.

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