Senior managers at Newcastle City Council are facing job losses and pay cuts as the authority tries to plug a £100m budget black hole.
More than half the senior management team will lose their jobs, while others face seeing wages slashed by up to £10,000 a year.
One insider described the move as a “bloodbath of the top brass” as around 36 highly-paid posts will disappear under the restructuring plan, with many managers facing redundancy.
It will save the council £1.5m a year and the money will be used to support services and fund a scheme to raise wages for lower-paid staff.
Under the shake-up, 64 management jobs will be axed and replaced with 28 new posts. Managers can apply for the new jobs, many at lower salaries. Those who are unsuccessful will face redundancy unless they are redeployed.
The council’s Labour leader, Nick Forbes, said he is determined to drive down management costs and improve efficiency.
But some managers are unhappy at the prospect of pay cuts and in some cases taking jobs with less seniority.
A handful could benefit with pay rises and more responsibility while others could stay the same, but one source said: “There will be a lot more losers than winners. This new structure puts all senior managers at risk of redundancy.”
Another said: “There’s a lot of discontent. If people have to move to a lower pay grade they could face salary cuts of up to £10,000 a year or maybe more.”
About half the savings will be used to fund Labour’s “living wage” scheme under which low-paid workers earn at least £7.20 an hour compared with the national minimum of £6.19.
The rest of the savings will help cushion the impact on services of budget cuts totalling £100m over three years.
Details of the proposals are revealed in a confidential report from chief executive Pat Ritchie to city councillors.
The re-structuring affects all senior managers below the level of the executive team, which has already been slimmed down.
Instead of three executive directors and three directors, headed by Ms Ritchie, there are now five directors.
The chief executive’s salary was cut by 10% before Ms Ritchie joined the council and she was employed on around £150,000 a year.
Under the proposals, management salaries at the top end of the range will drop from £94,000 to £84,000. At the bottom, the rate will rise from £45,000 to £46,000.
Managers who take jobs on a lower salary will have their pay protected for two years.
Those who do not get jobs will go into the council’s “redeployment pool” for 12 weeks, but if another job doesn’t come along they face redundancy.
Coun Forbes said: “I am determined to create a downward, deflationary pressure on management salaries because for years they’ve gone up and up without really being checked.
“We began by cutting the salary of the chief executive by 10% and that principle is now starting to filter through the rest of the senior management structure.
“We are driving down management costs to protect as many frontline services as we can in the face of massive Government spending cuts. By reducing management costs we can also invest in the living wage.
“We are pressing down salaries and reducing senior management numbers to ensure the council delivers value for money at a time of great financial pressure.
“We are also making sure there is a consistency across the organisation where some people have been paid at the top of the scales and some on lower scales. We are introducing fairness across the council in terms of the senior management structures.”
Coun Anita Lower, leader of the opposition Liberal Democrats, said: “This is the next stage of Labour’s plans to save money and cut staff at the Civic Centre. However, I think they have to be a lot clearer about the figures and the savings involved.
“Salaries will be protected for a time and these are going to be long-term savings, so how this is going to fit in with this year’s budget needs to be clearly demonstrated. I am not sure the benefits are going to show in the budget.”
In her report, Ms Ritchie says: “Our 2016 budget includes many proposals which will have a profound impact on the way we work and the city we serve.
“The financial situation we have been placed in will create many challenges for us for the foreseeable future. The proposals will create a leaner structure, removing management layers where we can, creating an extended management team with real commitment to change.”