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HM Treasury November 2025 special severance guidance for public sector exits: NCR-based approvals with £300k threshold, wider AO delegations, mandatory ALB/NHS sponsor approval, and FreM-aligned reporting

Published on: 01 December 2025

Published by a LexisNexis Employment expert
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Article summary

Guidance on Public Sector Exit Payments: Use of Special Severance Payments (Nov 2025)

What does the guidance do

The HMT ‘Guidance on Public Sector Exit Payments: Use of Special Severance Payments’:

  • outlines the factors employers must weigh before agreeing any special severance payment
  • describes the approvals needed to authorise such payments, including the relevant delegated thresholds
  • details the expectations on transparency and reporting
  • adds to the special severance material in HMT’s Managing Public Money, Annex 4.13

For more information, see Practice Note: Dismissing a senior executive—Public sector employees.

What are the practical implications of the guidance update

Special severance payments are sums paid on ending employment that do not align with any existing contractual, statutory or other legal entitlement. The kinds of payments captured will depend on an employee’s particular circumstances. Where the employer contests, in whole or in part, an entitlement to a termination payment, it should be treated as a special severance payment and is subject to approval...

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