To provide the Remuneration Committee with an
update on the Public Sector Exit Cap Regulations and their
implications for the Council.
The Head of Human Resources explained that an
update had been requested at a previous meeting on the Public
Sector Exit Cap Payments, which came into force on 4th
November 2020. The following points from the report were
- The exit cap payment included the
severance payments, pension strain cost and notice payments in
excess of three months.
- The three aspects to the regulations
were outlined in paragraph 3.3 of the report. It was noted that
further guidance was required on the proposals for high earners who
had to repay severance payments.
- There were some mandatory
relaxations of the regulations and some discretionary relaxations.
The discretionary relaxations which would have to be agreed by Full
Council were on the basis that if they did not exercise the power
they would cause undue hardship or significantly inhibit workforce
reform. Further details would be sought on this and a policy
approach to this would be part of the pay policy statement
presented to Full Council in January 2021.
- The discretionary waivers would have
to be submitted to the HM Treasury for approval. This was a
- A number of legal challenges had
been made to these changes. The judicial review into these could
take place as early as January 2021.
- The future proposed changes were
highlighted in paragraph 3.16. There was a potential problem of
multiple exits, which would require the Council to monitor exits
closely. Similarly, Solihull Community Housing was not included in
the regulations but a future amendment was almost certain to
include local authority owned or controlled companies.
- The Council’s Payroll Team
also administer NHS pensions and teacher’s pensions. The
changes implemented would not affect teacher’s pensions. With
NHS pensions, there were various considerations such as whether
they had transferred through a directions order or a transfer
order. Further guidance was awaited on this.
Members raised the following questions and
- Councillor Meeson asked how many
staff within the Council would be affected by the change. The Head
of Human Resources explained that the Pension Fund suggested it
could affect four in five people. It was noted that redundancy
benefits could be deferred.
- Councillor Caudwell asked whether
there would be an example of workforce reform (paragraph 3.7). The
Head of Human Resources stated that there was no precedent for
this, but imagined that it would need to be a fairly significant
reform of the workforce, for example Council wide senior
- Members queried that the legislation
would lead to the alteration of employees contracts, their terms
and conditions, which had been retrospectively changed. The Head of
Human Resources stated that there will be significant work about
the implementation of this change once they have received more
information, such as after the judicial review outcome. If there
was an exit prior to this which would be impacted by the
legislation, it was confirmed that an individual would receive the
reduced pension or defer the receipt of their pension.
- Councillor Sleigh asked if the Trade
Unions had been informed. The Head of Human Resources explained
that the Trade Unions had been kept fully informed and were aware
of this legislation.
Members of the Committee RESOLVED to note the contents of the report in advance of
receiving an updated Pay Policy Statement for consideration at its
meeting on 26th January 2021.