In our earlier blog (click here) we raised the issue of whether exit payments would be capped for registered providers under proposed legislation intended to apply to the public sector following the ONS reclassification.
DCLG has now confirmed to the HCA the following:
“Given that the Government is bringing forward measures to deregulate housing associations, with the aim of returning them from the public sector in the future, it does not expect to apply any additional requirements on housing associations, including the £95k cap on redundancies. The Government continues to urge boards to ensure that pay, bonus and exit arrangements are proportionate and defensible”
This will necessitate a change to the draft regulations published earlier this month (click here). Even with this change boards will, as is the case at present, have to justify any such payments on a value for money basis. Registered providers should be prepared for greater scrutiny where exit payments exceed the £95k cap as comparisons will inevitably be drawn to what can be paid in the public sector.