The government is being urged to put the implementation of the £95,000 public sector exit cap on hold or face a judicial review from local government.
A letter before action sent to the Treasury and the Ministry of Housing, Communities & Local Government on behalf of Lawyers in Local Government, the Association of Local Authority Chief Executives and the Society of Local Authority Chief Executives & Senior Managers says the cap as currently drafted is “unlawful in a number of respects”.
The letter says this includes the fact that the cap will come into force on 4 November, three days before an MHCLG consultation on bringing the local government pension scheme in line with the cap is due to close. This will mean at the very least that for a “number of weeks at least (and more probably for several months) the cap will be ‘half implemented’ for the LGPS”.
The letter says this would be “irrational even if there was genuine urgency about the matter,” and points out that it is four years since the Small Business, Enterprise & Employment Act 2015 Act paved the way for the introduction of the cap and more than 15 months since the close of the April 2019 consultation on draft regulations.
“The government has therefore displayed no sense of urgency hitherto in implementing the cap, and it is impossible to see any good reason for now doing things in a muddled rush,” it says.
It also questions whether the government can legally apply the exit cap “retrospectively” to pension rights accrued before the cap came into force and notes the British Medical Association, GMB and Unison have also threatened the government with judicial review.
The letter on behalf of the local government bodies says the only way to address the issues raised is to for the exit cap regulations to be “revoked, or at the very least substantially amended and their coming into effect deferred until the [MHCLG] consultation has been concluded and its results properly considered”.
It continues: “We invite you to agree as a matter of urgency that you will consent to a stay of the operation of the exit regulations… At the very least, you should consent to a stay as a temporary measure, so that the issues we have raised can be properly addressed.”
Without such action, LLG, Alace and Solace are likely to take further legal action to prevent the cap coming into force, it says.
LLG president Quentin Baker said: “Naturally, our preference is to resolve this matter without resorting to formal legal action and such a step would not be taken without full and careful consideration by the LLG board.”
The Treasury and MHCLG have been contacted for comment.
— to www.lgcplus.com