David Cameron secures extra severance pay against official advice

One of David Cameron’s final acts as Prime Minister was to overrule strongly worded civil service advice so that his advisers would get an extra £282,000 – or, an additional six months’ salary – in severance pay because of his resignation.

Mr Cameron’s decision will take the severance pay bill for his closest allies from £747,045 to £1,029,938, and set a precedent across all Government departments which could lead to another 30 special advisers getting the same deal, a top civil servant warned.

John Manzoni, the head of the civil service, had written to Downing Street this week stating: “I do not believe that there is a case for awarding higher sums than those for which the contract allows.”

Manzoni said he recognised “this is a difficult time for the individuals” and noted that “there had been an expectation amongst some that their severance sum would be higher, which has led to some disappointment”.

But he concluded: “My strong advice is that we continue to abide by the provisions in their contracts of employment.”

The special advisers raised concerns because, despite in several cases having worked in Downing Street since 2010, they were “reappointed” after the general election last year. This reduced their payouts, because the election was just over a year ago.

Mr Manzoni added: “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 the contractual entitlement.

“The contract itself is designed to provide some degree of certainty and security for individuals who take on these roles in the knowledge their appointments may come to an end at short notice.”

Mr Manzoni added: “If the Prime Minister’s view is that we should nevertheless proceed with awarding six months’ severance pay I will proceed accordingly, but I would request his written direction in order to do so.”

Following Cameron’s intervention, long-standing Downing Street aides such as chief of staff Ed Llewellyn will be entitled to six months’ salary. This means he will receive £70,000. Llewellyn is also tipped to receive a peerage in Cameron’s resignation honours list.

Craig Oliver, who has worked at Downing Street as director of communications since 2011, will also be entitled to half his £140,000 a year salary.

Theresa May’s official spokeswoman did not endorse the decision on Friday, saying: “This was a decision taken by the former prime minister, taken before the prime minister took office.”

There were worries within the civil service that it could set a precedent across all government departments which could lead to another 30 special advisers getting the same deal.

“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 the contractual entitlement,” Manzoni said.

“The contract itself is designed to provide some degree of certainty and security for individuals who take on these roles in the knowledge their appointments may come to an end at short notice.”

“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.”

Mr Case, who said Mr Cameron wanted the six months rule applied across Government, sent the letter on Wednesday – the day Mr Cameron quit Downing Street for good – in response to Mr Manzoni raising his concerns the previous day.

The news comes as the government is expected to announce a list of honours by Cameron that are likely to hand his closest aides peerages and other rewards.

May is also expected to continue with her reshuffle later on Friday and over the weekend, after filling 21 cabinet positions on Wednesday.

The rest of the appointments were delayed for her visit to Scotland to meet the first minister, Nicola Sturgeon, and by the need to respond to the truck attack in Nice, France.

May’s cabinet has cleared out many of those closely associated with Cameron, including George Osborne and Michael Gove.

The shakeup will also mean large payouts to departing cabinet ministers, including John Whittingdale and Nicky Morgan.

Matt Hancock, a key ally of Osborne, was not given a cabinet job, while Anna Soubry, the outspoken pro-EU business minister, appears also to have lost her right to sit in the cabinet.

May’s appointments have greatly increased the number of state-educated people in top jobs, and rewarded former colleagues from the Home Office such as James Brokenshire, who became the new Northern Ireland secretary, and Karen Bradley, who was promoted to culture secretary.

The prime minister appointed eight women to the cabinet – one more than Cameron.

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