Gordon Brown was accused of gesture politics yesterday after intervening to reduce Whitehall severance payments by £500million and to curb senior officials\’ pay.
The Prime Minister announced that the current redundancy packages, which give civil servants three times their annual salary if they lose their jobs, will be abolished.
Whitehall sources admitted that the Prime Minister had ordered officials to insist upon plans to reduce severance payments, which were still being negotiated with unions. At present all civil servants receive a lump sum of two years\’ pay if they take voluntary redundancy having worked 20 years in Whitehall and three years\’ pay if the redundancy is compulsory.
An official on £80,000 would be entitled to a £240,000 payoff under current rules. Under the Government\’s plan to mirror the statutory severance pay adopted by much of the private sector this could fall to nearer £7,000.