Redundancy pay cap ‘would hit ICB and national staff’, union warns

Integrated care board and national agency staff could be hit by government plans to cap redundancy payments at £100,000, as they are required to cut running costs, a union has warned.

Health and social care secretary Steve Barclay confirmed ministers wanted to explore the introduction of a cap in a recent open letter to NHS staff, following the agreement of the Agenda for Change pay deal. Talks over the cap were part of the “non-pay” parts of the deal.

ICBs have been told to reduce their admin costs by at least 30 per cent over this year and 2024-25, which is very likely to lead to senior redundancies for many.

NHS England is making big staffing cuts too, although if it sticks to its current timetable, these would be complete before any cap could be introduced. 

But Jon Restell, chief executive of the Managers in Partnership trade union, told HSJ the proposed redundancy cap was “arbitrary” and “unnecessary”.

He said it “unfairly penalises public servants with long service and fails to recognise that these staff are losing their employment through redundancy”.

Mr Restell added: “Applied to the NHS, the cap would disproportionately hit staff in NHS England, ICBs and arms-length-bodies, who already face job losses through government-driven ‘efficiency’ programmes and major reorganisations.

“We believe that the NHS needs a proper strategic approach to the redeployment and retention of managers and their valuable skills, rather than the current push for managerial job losses and an arbitrary exit payment cap.”

Unions stressed they had committed in the Agenda for Change deal to hold discussions about the cap, but not necessarily agree to it.

The government was forced to drop plans to cap exit payments at £95,000 for public sector workers in 2021 following a legal challenge from trade unions.

Unions feared the legislation would also impact long-serving NHS staff because other factors, such as NHS pensions, could push them above the threshold.

A Department of Health and Social Care spokeswoman said: “Any changes to NHS redundancy terms are made through collective agreement by the NHS Staff Council.

“As part of the Agenda for Change pay deal, parties agreed to consider making changes to terms that would bring in a redundancy payment cap of just under £100,000.”

UPDATED: This article has been updated to include a comment from the DHSC post-publication.