The government has confirmed that the proposed to place a limit on payments to departing employees in the public sector will go ahead, with the publication for illustrative purposes, pending further debate, of the Draft Public Sector Exit Payment Regulations 2016. The draft Regulations, impose a cap of £95,000 on the total aggregate value of exit payments made to most public sector workers. This includes redundancy payments, payments to reduce or eliminate what would otherwise be a reduction to a pension on early retirement, payments for early termination of fixed term contracts, payments by way of shares, and any other payment (whether or not contractual) made in consequence of loss of employment – including payments in lieu of notice.

The draft Regulations would not apply to certain public sector bodies including the military, theBBC and Channel 4, financial services regulatory bodies, RBS, and the Bank of England. In other cases the cap could be lifted with consent of the relevant government minister, or from the full council in the case of local government.