I agree although in some circumstances, contracting for your former employer may be violating your employment agreement with your current one.
Often, if made redundant by a company, you cannot return to work for them (as employee or contractor) for a year, otherwise you have to pay back your redundancy pay.
That leads to a potentially hilarious conversation about rates.
"I'll do it, my rates are 100 per hour plus 10K if you want me to start before June next year"
That being said, the issue with redundancy packages is that taxes are involved and those guys will be inflexible if they find out that your package turns out not to be tax-free after all.