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Government calls time on public sector parachute payments for boomerang bosses

New changes have been announced to stop highly paid bosses getting to keep generous exit payments when they leave one organisation only to join another.

Tens of thousands of highly paid public sector bosses are to be forced to pay back their golden goodbyes, or exit payments, if they return to the sector within a year.

The government said it is delivering reforms to the revolving door culture that currently exists in some parts of the public sector by bringing nearly double the number of public sector bosses under the scope of new clawback legislation.

Until the government set new rules around the recovery of public sector exit payments earlier this year it was not a legal requirement for public sector bosses who received an exit payments to pay it back if they got a new job in the public sector.

The changes build on those new rules which were set out in the Small Business, Enterprise and Employment Act 2015. They mark the next step in the government’s plan to modernise Britain’s public services and will come into force in April 2016.

Chief Secretary to the Treasury, Greg Hands said:

“It is unacceptable that in the past, working taxpayers have had to fork out for golden parachute payments for highly-paid public sector workers who then go on to get jobs in another part of the public sector.

“Some of these payments have been worth hundreds of thousands of pounds. We’ve already delivered on our pledge to end six-figure pay-offs in Whitehall.

“Now we’re going further, and delivering a system that will mean exit payments are clawed back if public sector workers who get them simply join another organisation within months.

“We are determined to deliver more for less in public services, so that the taxpayers who fund them get the very best value for money.

“Today’s consultation on regulations to recover exit payments is just the latest step in modernising terms and conditions in the public sector, which has already saved taxpayers £12bn over the last parliament.”

The Author

Paul Elliott
Media Researcher
BiP Solutions

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The Author

Paul Elliott
Media Researcher
BiP Solutions

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