Ministry of Housing, Communities and Local Government: Redundancy Pay
The question
To ask the Secretary of State for Housing, Communities and Local Government, for what reason the final 2025–26 departmental pay settlement was not applied to staff who left the Department under the Voluntary Exit Scheme after being employed on the date from which the pay award was due to take effect but before the settlement was finalised; whether he has considered providing retrospective payment to those former employees; and what assessment he has made of the potential impact of that decision on redundancy compensation and pension calculations.
Answered by Samantha Dixon
The 2025/26 pay award reflected an exceptional pay flexibility agreement, reached following negotiations with the recognised Trade Unions and approved within the Civil Service pay framework. The award was based on clearly defined criteria that targeted investment in specific areas to aid recruitment and retention of skills we need to deliver in future as an organisation. The Voluntary Exit Scheme, separately, allowed staff to exit the organisation based on targeted criteria which focussed on the suitability of skills, talent and deployability relating to the Department’s future workforce priorities.
Civil servants are contractually entitled to an annual pay review, but there is no contractual entitlement to a specific uplift or eligibility for any particular award. Decisions on eligibility and distribution are determined each year through negotiation with recognised Trade Unions and may vary.
For 2025/26, eligibility for further elements of the pay award required individuals to be in post on the departmental settlement date and not to have left, or be leaving, under the Voluntary Exit scheme. Those leaving under that scheme received the interim pay award agreed earlier in the process.
The Department has no plans to make retrospective payments. Impacts on exit terms and pensions were considered as part of the overall decision-making process.
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