Overview

This bill mandates the UK Treasury to create regulations limiting exit payments for public sector employees. These regulations, to be implemented by January 1st, 2026, will retrospectively apply to payments made after October 1st, 2025, aiming to control public spending on severance packages.

Description

The Public Sector Exit Payments (Limitation) Bill requires the Treasury to draft and present regulations to Parliament by January 1st, 2026, under Section 153A of the Small Business, Enterprise and Employment Act 2015. These regulations will restrict the amount of exit payments given to employees leaving certain public sector organisations. Critically, the first set of regulations will apply retroactively to exit payments made from October 1st, 2025 onwards. The bill applies across England, Wales, Scotland, and Northern Ireland and comes into force upon its passage.

Government Spending

The bill aims to reduce government spending on public sector exit payments. While specific figures aren't provided in the bill itself, the legislation's intention is to limit the amount paid out in severance packages, resulting in potential cost savings for the UK Treasury.

Groups Affected

The bill primarily affects:
• Public Sector Employees: Potentially reduced severance payments upon leaving their jobs.
• Public Sector Organisations: Changes in their financial obligations concerning employee departures.
• The UK Treasury: Responsible for drafting and implementing the regulations and managing the financial implications.

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