THE North’s biggest local authority plans to scrap its practice of awarding “added years” payments to staff for non-existent service as it bids to cut costs.
The ability to award added years and enhanced redundancy payments are “discretionary powers” which Durham County Council used to tempt senior officers to take voluntary redundancy after local government reorganisation turned the county council into a single unitary authority last year.
Under the present arrangements, staff who take early retirement or voluntary redundancy can be awarded up to 82.5 weeks salary – or 29 months – or alternatively have years “added” to an already lucrative pension scheme.
But next week, interim director of resources, Barry Scarr, will tell councillors: “The council is among a reducing number of authorities still offering added years to the pension as part of its early retirement policy.
“The cost of providing added years is typically higher than the cost of awarding an enhanced redundancy lump sum.”
He will add: “The days when local authorities are able to award added years for pension purposes and maximum enhancement for redundancy must be seen as limited.” The scrapping of the “added years” for pension purposes “would reduce the cost implications for taxpayers in the county and put the authority more in line with other similar public sector bodies,” reports Mr Scarr.
But county councillor John Shuttleworth pointed out that many officers enjoyed rises as high as 44% – and increased pensions to match – following local government reorganisation last year.
He said: “These proposed changes are tantamount to locking the stable door after the horse has bolted.
“I warned about the inflation-busting rises some officers were being awarded after the transition to becoming a unitary authority, but nobody wished to listen.
“I know of one officer in the education department whose pay increase went from £71,000 a year to £110,000 which was 44% for no extra responsibilities. Remember, education was the sole responsibility of the old county council before the merger with the district councils.
“It was the same in social services. Officers were receiving inflation busting rises the like of which you would not see in the private sector.
“Their pay rises were then reflected in their extra pension entitlements when they volunteered for early retirement soon afterwards.”
County council cabinet member for resources, Alan Napier, said: “The council is already facing in-year reductions of some £18m and it is expected that the Comprehensive Spending Review, due in October, will outline the need for further significant savings.
“For these reasons, it is important and timely to look at these matters now.”
Full council will consider the recommended changes in ERVR terms at a meeting at County Hall next Wednesday.