A number of civil servants in government departments are "treading water", with no job to do, because it is too expensive to make them redundant, according to a minister.
Cabinet Office minister Francis Maude made the admission as he gave evidence, on the Civil Service Compensation Scheme to the Public Administration Select Committee, on 27 July 2010.
Mr Maude was being questioned on emergency legislation to change civil servants' terms and conditions, which will cut redundancy pay.
Civil servants made redundant will have their payouts capped at one year's salary.
The maximum on offer for those taking voluntary redundancy would be limited to 15 months' salary.
On average civil servants receive pay-offs worth three years' salary under the current scheme.
The Public and Commercial Services (PCS) union won legal action to block a cap at twice the annual salary by the previous government.
Earlier, Paul Noon general secretary of the union Prospect, told the committee that Mr Maude's decision to legislate before negotiations had "put a gun to our heads".
The PCS's deputy general secretary Hugh Lanning told MPs he thought it was "still unlawful" for the government to take away the accrued rights of civil servants.
Jonathan Baume from the FDA union also gave evidence.
The committee then took evidence from Mr Maude and fellow Cabinet Office Minister Oliver Letwin on the work of the Cabinet Office.
This session also examined the government's plans for the reform of the public sector, including civil service reform, the "Big Society", public spending reductions and the abolition of the quangos.