Exit payments cap – HMT rule to disapply the regulations

The implementation of a £95,000 cap on public sector exit payments, including employer contributions to pension costs, came into effect on 4 November last year. After an extensive review of the cap, which the LGA have repeatedly raised issues around, the Government has agreed that the cap may have unintended consequences. The Treasury on Friday ruled that it will immediately disapply the regulations and effectively scrap the cap. We will update guidance this week to reflect the immediate consequence of this for councils.