Redundancy payout plan altered to save council cash

A COUNCIL set to shed hundreds of jobs has sparked fresh anger by planning to cut redundancy payouts.

A COUNCIL set to shed hundreds of jobs has sparked fresh anger by planning to cut redundancy payouts.

Northumberland County Council plans to axe hundreds more posts this year – including an estimated 200 compulsory redundancies – to help achieve Government-ordered budget savings of between £45 and £60m.

Now it is facing strong opposition from staff unions over moves to reduce the massive cost of redundancy payments by changing its current severance scheme from April. The changes involve getting rid of a financial mechanism, which bumps up workers’ flat redundancy entitlements and makes it more attractive for them to leave voluntarily.

In some cases, the proposed change could make a difference of several thousand pounds to what employees made redundant walk away with.

Yesterday trade unions at County Hall claimed cutting payouts will affect the number of workers willing to leave voluntarily.

In addition, they said it will deal a financial blow to ex-council workers struggling to find a new job in an area which is highly reliant on public sector employment.

About 500 more posts are set to be axed in the 2011/12 financial year, and the council’s leadership recently admitted that more than 200 compulsory redundancies could be required.

Now the cost of the severance scheme – which has already been reduced once since the unitary authority was established – looks set to be trimmed.

Yesterday Allan Douglas, Unite’s branch chairman at the authority, said legal advice was being sought by the joint trade unions, but they would strongly oppose any move to downgrade payouts.

“It is bad enough losing your job in the current climate, but to reduce redundancy payouts is rubbing salt in the wound,” he said.

“For people leaving the council after April, this will cost them a lot of money, and we will fight it because it is adding insult to injury.

“This is driven by finance and the facts are that the council wants to get rid of people, but doesn’t want to pay them.”

GMB regional officer, Mark Wilson, said: “If they remove the incentive for people to leave voluntarily, by removing this enhancement, then we are inevitably going to be in a compulsory redundancy situation every time there are further job losses at the county council.

“Reduced payouts will also hit low-paid, part-time council workers who will find it very hard to get private sector employment in Northumberland.” Under the current severance scheme, council employees get their individual redundancy entitlement multiplied by 1.75 to give them their final payout. A review of the scheme proposes getting rid of this multiplier. A decision is expected to be made by the Liberal Democrat executive next month.

Yesterday council leader Jeff Reid said the scale of job losses required at the authority meant the current severance scheme was deemed too costly.

“We simply cannot afford this. The more money we have to spend on redundancy payments, the less we have for front-line services and keeping other people employed. The organisation has to downsize and we are proposing to reduce the severance scheme to the minimum required by the Government.”

For people leaving the council after April, this will cost them a lot of money

 

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