THE COST of redundancy pay-outs has dropped for the first time since the start of the credit crunch, new research out today shows.
British companies spent £4.1bn on staff redundancies in the year to 31 March, down 11 per cent on the previous year, according to commercial law firm EMW.
The number of redundancy payments made has also fallen 10 per cent from 410,000 in 2011-12 to 370,000 in the past year.
Affected staff were handed an average £11,081 in 2012-13, which according to data from the Office for National Statistics is equal to more than six months’ pay for workers earning the UK’s full-time median salary of £26,500.
This is down 1.2 per cent from £11,219, the average redundancy payment in the previous year.
“Despite the total cost of pay-outs falling, the still relatively high average pay-out suggests that there are still fairly large numbers of public sector redundancies feeding through the system,” EMW principal Jon Taylor said.
The cost of public sector redundancies in central government alone in 2012-13 was £287.4m, with 15,000 civil servants made redundant with severance pay of up to 24 months for long-serving officials.
Taylor explained: “Public sector redundancy pay-outs tend to be higher than those available for private sector workers, owing to the strong unionisation of the public sector and the availability of historical enhanced redundancy schemes.”