Redundancy volunteers may be rejected because of high cost

Alexandra Wood

SOME of the hundreds of workers hoping for voluntary redundancy from Hull Council may not get their wish because of the multi-million pound cost.

In total 542 workers have signed up to leave the authority, out of more than 1,000 who originally expressed an interest.

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According to a new report, if they all went, the total cost to the council would be more than 13m – making an average payment per worker of 24,000.

Eventual payouts will be calculated by multiplying weekly pay by length of service – up to a maximum of 20 years – and then multiplying by 2.45.

Workers aged 55 and over could qualify for early retirement, including the payment of a lump sum. The report says this could cost the council a third of the total cost.

However council leader Carl Minns said yesterday he would be “very surprised” if the council found the money to let everyone go. It was too early to say whether there would be a further round of voluntary redundancies, he added.

The council’s Cabinet met yesterday to consider the scheme.

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Heads of service will now be asked to come up with business cases setting out the costs and how to mitigate any impact on services. A final decision will be made in December with those staff who are leaving going by December 31.

Labour group leader Coun Steve Brady said the process smacked of panic. “What really worries me is how they are going to run the services. Is it a rational decision or is it a sign of panic to get the council’s costs down quickly?

“To me it’s a sheer case of panic at the moment. I am not saying that difficult decisions won’t have to be taken but it seems as though the council’s finances are all over the place.”

However Coun Minns countered: “It smacks of realism. Everybody outside the hardliners in the Labour Party knows the country is in a financial mess and that will impact on the council.

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“It makes more sense to ask people who want to leave the council on a voluntary basis rather than by compulsory means.”

Coun Minns said tomorrow’s Comprehensive Spending Review would give an indication of how much the council needed to save – which could be between 20m and 34m. He said it would be unfair to speculate on how many would be allowed to leave this year.

He said: “Some people are going to be disappointed. I’d be very surprised if the council finds the money to let everyone who has expressed an interest to go.”

A report going to the council’s Cabinet said the voluntary redundancy scheme could cost a maximum of 13.257m based on all 542 workers going but it would save 14.364m in salaries in 2011/2012.

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The report says the authority may have to seek permission from the Government to use money from its capital budget. It adds: “The council faces a significant financial challenge over the next few years given the anticipated drop in Government funding.

“This will inevitably require a reduction in the workforce and a voluntary early termination scheme would support the delivery of cost reductions in future years.

“It is important that the decision to release staff is based on clear business cases which ensures that any staff reductions are achieved without causing additional financial pressures in those service areas.”

All non-school workers at the authority were asked if they want to be considered for voluntary redundancy. Initially 1,101 expressed an interest – one in seven of 7,600 staff. Hull Council employs a total of 13,295 people.

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