£3.8bn, the cost of redundancy payments last year

British firms paid out an estimated £3.8 billion to more than 250,000 employees who were made redundant during the 2016-17 financial year.

The report, published by law firm Hugh James, shows that despite this significant figure, the amount is still down from £4 billion in 2014-15 and 2015-16.

The value of redundancy pay-outs over the past year averaged £15,000 per worker – slightly more than the maximum statutory pay for redundancy per employee, which is currently £14,670.

Head of Employment at Hugh James, Emma Burns, says: “Despite the relatively high costs, redundancies can make a workforce leaner and more fit for purpose.

“Businesses should not shy away from redundancy exercises. However, in some cases, businesses may be better placed to consider other measures such as changing employee terms and conditions or cutting hours. This can reduce the pay bill, without having to pay redundancy costs.

“There may be additional redundancies if uncertainty over a Brexit deal continues – and there remains a potential that some jobs will be moved overseas in the long term.”

A recent paper commissioned by London Mayor Sadiq Khan showed that a “no deal” Brexit could see the loss of 87,000 jobs in London by 2030. The report estimated that the City could face 75,000 job losses post-Brexit. Adding to this, the Bank of England said recently that it is anticipating 10,000 “day one” job losses after March 2019.

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To arrange a confidential discussion, contact Andy Pear or Mike Solomons at BM Advisory. Your initial consultation will be free of charge and without obligation. Together we will discuss your individual situation and advise on the best course of action.