UK Unions Face Budget Cuts, Pay Cuts, Massively Reduced Severance Benefits

As the UK continues with its austerity program, British public unions are screaming loudly.

The Telegraph reports Ministers to slash pay-offs for civil servants.

Generous “golden goodbye” payments to civil servants are to be cut drastically to make it cheaper for ministers to lay off thousands of public sector staff, The Daily Telegraph has learnt.

The changes, which will provoke a major confrontation with the unions, come as government departments are drawing up plans for budget cuts of up to 40 per cent.

With hundreds of thousands of state employees facing the sack, Civil Service managers have been told that tough new restrictions on redundancy payments will be in place within weeks.

Under existing Whitehall rules, some civil servants are entitled to severance payouts worth as much as six years’ salary. Ministers want to shrink those packages to bring them in line with the private sector, where workers who are made redundant typically receive the equivalent of a few months’ or even weeks’ pay.

Treasury figures suggest that more than 600,000 jobs will be lost in the public sector over the next five years as almost £100 billion is cut from public spending.

Ministers have identified the traditionally high cost of laying off staff as a major obstacle to enacting their plans for cuts and improving efficiency.

Some ministries have “pools” of several hundred workers who do not have allocated jobs but who are not sacked because of the cost.

I commend the UK for finally doing something about its bloated public union problem.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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