Nearly 300 council workers were laid off last year – costing taxpayers more than £12 million in exit packages.
Stoke-on-Trent City Council terminated the contracts of 287 employees in 2019/20, and paid them a total of £6.48 million in compensation, with a further £5.58 million being paid into the pension fund.
The single biggest exit package cost the council £257,000, including £100,000 in compensation, paid to an unnamed worker. The second biggest cost £218,000.
Both the number of exit packages and their total cost increased dramatically on 2018/19, when just 68 workers were axed at a cost of £2.6 million.
This increase was largely related to last year’s mid-year emergency budget, which saw 200 jobs cut so £5.5 million could be diverted to the council’s failing children’s services. Cuts were made in services such as street-sweeping and grass cutting.
But just three of the job cuts last year were compulsory redundancies – down from four in 2018/19.
The £12.05 million was the highest amount paid out in exit packages in a single year since 2010/11, when 804 contracts were terminated at a cost of £14.3 million. And it was the highest number of exit packages since 328 workers were laid off in 2013/14.
These details are included in the city council’s draft statement of accounts for 2019/20 – the publication of which was delayed due to the pandemic.
The document states: “The authority terminated the contracts of 287 employees in 2019/20 mainly as a consequence of the ongoing corporate restructuring programme.
“A total of over £6.5m in compensatory payments was incurred (including redundancy costs and post employment notice pay) plus an additional £5.6m payments to the pension fund in respect of actuarial strain costs.
“Five people have committed to leave in 2020/21 and a total of £0.2m has been included in a provision.”
Tony Jones, regional organiser for the Unison trade union, condemned the number of job cuts at the city council. He also fears there could be further redundancies coming due to the financial hit the council has taken as a result of the pandemic.
Mr Jones said: “One council worker going is an issue – never mind 287.
“Councils have been suffering financially for years due to the austerity measures imposed by central government, which has impacted on local services and the staff who provide them.
“When staff are laid off, those who are left behind then have to do the work of three or four of their colleagues.
“But councils haven’t done themselves any favours by continuing to employ consultants with huge daily fees. It seems that council workers are just seen as a way of saving money.
“The financial issues faced by councils now as a result of Covid-19 are of great concern to our members. We have been lobbying government, and asking the LGA to lobby government, to get local councils the support they need.
“The settlement announced by the Chancellor earlier this year was welcome, but it won’t be anywhere near enough to make up for everything councils have lost because of Covid-19.”
Council leader Abi Brown defended the number of job cuts made last year, and the cost of the exit packages.
She said: “Following the Ofsted review of children’s services, there was a clear commitment in May 2019 from myself as the city council’s new leader, of the need to drastically improve support for some of the most vulnerable children and young people in our city. This required an urgent injection of funding to not only stabilise the service but also to start to address the continued rise in the number of children within the care of the council.
“As an organisation, we employ over 5,000 people delivering 700 services right across the city, and it’s only right that we regularly review this to ensure that tax payers’ money is well spent. The funding for urgently improving children’s services came from a range of proposals, which included some corporate restructuring around individuals who had indicated that they wished to leave their roles at the council. In total, 287 employee contracts were ended in 2019/20 at Stoke-on-Trent City Council, with only three being compulsory redundancies. There was extensive public debate and consultation about the proposals at the time. At the same time, it should be noted that within the last 12 months, Stoke-on-Trent City Council has made over £15m in savings which are also reoccurring for future years.
“In total, £6.5 million in compensatory payments was incurred – this includes all redundancy costs and notice payments. This sum equates to an average of £23,000 per person. An additional £5.6 million was paid to the Staffordshire Pension Fund for actuarial strain costs, covering the cost of pensions for those who left the council.”
The statement of accounts show that 187 city council staff were paid £50,000 or more last year – up from 149 in 2018/19. But 61 of these workers were pushed into this bracket by their redundancy payment.