HC Deb 05 December 1994 vol 251 cc10-1W
Dr. Twinn

To ask the Secretary of State for the Environment what provisions he intends to make for employees in local authorities in England and Wales affected by local government reorganisation and for severance pay generally; and if he will make a statement.

Mr. Curry

Regulations have been laid before the House today which provide mandatory compensation terms for staff made redundant by the reorganisation of local government in England and Wales. In addition, the regulations give local authority employers the opportunity to provide improved levels of severance pay in general cases of redundancy and new powers to pay compensatory lump sum payments to groups of eligible pensioners whose pensions were reduced following the Court of appeal judgement in Allsop v. North Tyneside MBC. The regulations come into force on 28 December. Copies have been placed in the Library.

In making these regulations we have built on the proposals which we consulted earlier this year, and we have taken account of all the representations which we have received, including the advice and comments of the Local Government Staff Commission (England) and the Staff Commission for Wales.

The regulations now provide a new statutory framework for employers to compensate employees made redundant in the future on the basis of a tariff linked to the age and service of the employees concerned. For cases of redundancy due to reorganisation, special mandatory provisions will apply. This recognises the key role of local government staff in the transition to reorganised authorities.

The cost of all severance payments must be met from authorities' own resources and not from local authority pension funds. Future settlements will take account of the transitional costs of local government reorganisation, including those arising from severance payments.

I am pleased also to announce two consultation exercises beginning today with the local authority associations, local authorities and other local government interests. The first deals with proposals for a detriment compensation scheme in England and Wales to provide compensation to employees who suffer a reduction in salary as a result of reorganisation. The second is about draft regulations to provide arrangements for general staffing matters arising from reorganisation in England. Responses to both of these exercises are being requested by 23 January 1995.

Copies of both consultation papers on a detriment scheme and the draft regulations on staffing are also being placed in the Library.