David Cameron has sparked fury from civil service unions after he ordered Cabinet Office permanent secretary John Manzoni to grant extra severance pay to his outgoing team of special advisers, despite Manzoni raising value-for-money concerns over the move.
Letters published on GOV.UK amid new prime minister Theresa May's appointment of her Cabinet shows that Cameron was concerned that his team of special advisers, who are political appointments and now find themselves out of a job following his departure, were facing sudden ejection from government, with the prime minister seeking to add an extra months' pay to their redundancy packages. The move comes at a time when the Cabinet Office is seeking to reduce exit payments for permanent civil servants.
A note from Manzoni, the Cabinet Office's top official and the chief executive of the civil service, to the then-prime minister's principal private secretary Simon Case, reveals that Cameron was "concerned about the way in which severance payments for outgoing government special advisers have been calculated".
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Manzoni says the outgoing prime minister was worried that the employment of those Spads reappointed after the 2015 general election was "terminating more quickly than they had originally envisaged", with Cameron leaving office well ahead of his planned September departure.
But while the Cabinet Office perm sec says he recognises that "there had been an expectation amongst some that their severance sum would be higher, which has led to disappointment", he pushes back against a request to award them the extra severance payments that Manzoni says would result in the Cabinet Office paying out a total of £282,892 more to the advisers than they are contractually entitled to.
"I do not believe there is a case for awarding higher sums than those for which the contract allows" – Cabinet Office perm sec John Manzoni
Manzoni writes: "I do not believe there is a case for awarding higher sums than those for which the contract allows. Legal advice supports this position, and lawyers have been clear that awarding a further month's salary for Special Advisers in this position would constitute a payment above their contractual entitlement."
Manzoni says that while he recognises the "importance of properly recognising the service of this group of individuals" as well as the "challenging circumstances in which they now find themselves", he points out that the contractual position for their exit packages "is clear", with the contract already "designed to provide some degree of certainty and security for individuals who take on these roles in the knowledge that their appointments may come to an end at short notice".
He then requests a ministerial direction, the formal mechanism by which a departmental chief can raise their concerns before ministers decide whether to ask them to proceed regardless. Ministerial directions are scrutinised by both the National Audit Office and the Public Accounts Committee spending watchdogs.
"Sudden and unexpected"
But the following day, Case at Number 10 writes back to Manzoni asking him to press ahead with the extra payment for the Spads, saying that Cameron is "mindful of the loyal and dedicated service that has been provided to him over the past six years by his team" and is "conscious that the situation they find themselves in is through no fault of their own".
"The termination of their employment has been sudden and unexpected, and he does not wish to exacerbate an already difficult and uncertain time for them by inferring that their long and loyal service is not fully recognised," Case adds.
"We're appalled that Cameron would seek to reward his political staff in this way, as civil servants have been told they must face further cuts to their redundancy terms" – Mark Serwotka
Case says Cameron has therefore decided that the Cabinet Office should make the additional payments to Spads that were reappointed in 2015, over-riding their contracts. And he says that all Spads "across government" who were reappointed after the election, and who left office this week, should now be awarded the equivalent of six months' salary.
The move has already triggered an angry reaction from the Public and Commercial Services Union (PCS), which represents rank-and-file officials, the FDA, which represents senior managers, and Prospect, representing public sector specialist staff.
The three civil service unions are particularly incensed because the decision comes after the Cabinet Office launched a wide-ranging review of the Civil Service Compensation Scheme which sets redundancy payments for civil servants earlier this year. All proposed options in that consultation are set to result in less generous exit packages for officials, with the government arguing that the reforms were needed will save “just over a third” on the current costs of exits and improve the ability of civil service employers to manage their workforces.
A PCS spokesperson said: "We're appalled that Cameron would seek to reward his political staff in this way, as civil servants have been told they must face further cuts to their redundancy terms. It's that kind of cronyism that gives politics a whiff of corruption and erodes public trust."
Dave Penman, general secretary of the FDA union branded the move and "an astonishing act of hypocrisy from Cameron, increasing redundancy pay for his Spads, whilst in the middle of cutting redundancy terms for the rest of the civil service."
Penman added: "It sends a clear message about who he valued most."
Prospect's deputy general secretary Garry Graham was similarly outraged, saying: “The decision by the prime minister in contravention of legal advice, to make a special case to boost the exit payments for his special advisers will be seen by civil servants and the country as truly breathtaking.
"At a time when the government is seeking to reduce severance terms across the civil service and wider public sector this demonstrates a level of hypocrisy and disdain for hard working civil servants that many will find hard to stomach."
CSW understands that Graham is to write to new prime minister May to raise his union's objections to the move.