The cap didn’t fit, and lessons must be learned from it

By Heather Jameson | 17 February 2021
  • Heather Jameson

It all seemed such a good idea. There is political capital to be made in clamping down on the ‘football manager-style’ cash hand-outs to fat cat public sector bosses.

What’s not to love about playing up the prejudices of the back-benches and blue rinses; the politics of envy of the low paid and just about managing. A cap on exit payment feels, at first glance, to be righteous indignation at frittering away taxpayers’ cash on the undeserving and over-paid, standing up for the little people. Or so it seems.

But in reality, the £95,000 cap on exit payment plan was – until the Government’s dramatic U-turn last week – an erosion of employment rights not just for the highly paid execs it was aimed at.

‘The cap may have had unintended consequences’ the Government said as it revoked the rule. And a looming legal case may have gone against the Government if it had failed to back down. Protecting employment rights is worth more than just playing to the gallery.

The exit payment cap, like many other politically driven policies, was born out of the Eric Pickles era of local government. The former communities secretary ramped up the rhetoric on several fronts in an effort to garner outrage and support at the failures of local government.

From fat cat salaries to bulging biscuit budgets, Mr Pickles chased Daily Mail headlines under the pretext to defending the people – all the while undermining local government.

The godfather of self-sufficiency, Mr Pickles slashed budgets and called on councils to dive head first into commercialisation. Only now they face the wrath of the current communities secretary for their folly – commercial investment is no longer in vogue.

As the unions put in their latest pay claim – for a 10% rise for frontline workers – it seems the reward for local government’s heroes of the pandemic is more likely to be another decade of austerity than a hefty pay rise.

But I’d like to think the Government has learned its lesson too on frittering away employment rights for the sake of a good headline.

Exit pay cap revoked

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