Severance Pay (Hansard, 14 June 1994)

§ Mr. Baldry

We are today beginning consultations with local government and other interested parties on new severance pay regulations to complement the Local Government (Compensation for Premature Retirement) Regulations 1982. Local authority associations, local authorities and other local government interests are being invited to submit representations by 13 July. Copies of the consultation material are being placed in the Library. We intend, subject to any further representations, to make and lay the regulations before the House in the summer.

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We are proposing to give councils new powers to allow one-off payments to categories of pensioners who had their pensions reduced as a consequence of the Court of Appeal's judgment in Allsop v. North Tyneside.

Our proposals also give councils the opportunity to provide improved levels of severance pay both for general cases of redundancy as a result of local government reorganisation. In developing our proposals we have considered carefully the advice of the Local Government Staff Commission (England) and views expressed by other interested parties.

I am satisfied that these proposals are both fair in comparison with other public service schemes and affordable to local government. They provide a good statutory framework to help compensate employees made redundant and the terms proposed compare favourably with those available to other public sector employees.

These proposals do not cover the staff commission's recommendations to compensate employees for reductions in pay—detriment—on which a further announcement will be made shortly.

Costs of all severance packages must be met from authorities own resources and not from local authority pension funds. Future local government finance settlements will take account of the transitional costs of local government reorganisation, including those due to severance payments.