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Home / Latest News / Councils splash out more than £31m on redundancies despite warnings on budgets

Councils splash out more than £31m on redundancies despite warnings on budgets

Cash-strapped councils across Wales have shelled out more than £31m in payouts for voluntary redundancies over the past three years – despite dire warnings over shrinking budgets.

Figures obtained by the Welsh Conservatives through Freedom of Information requests found that Wales’ 22 councils paid out the sums, despite council leaders suggesting they were seeking to change Big Lottery Fund rules to allow lottery money to go towards local services.

The party’s leader Andrew RT Davies claimed that the figure – which represents payouts of 18 of 22 councils – represents the “tip of the iceberg” and labelled the sums “lavish and unnecessary”.

But the Welsh Local Government Association (WLGA) defended the payments, pointing to statutory duties placed on councils to make them – and saying they amounted to only 0.2% of revenue expenditure and were in any case being forced due to UK-imposed austerity measures.

Blaenau Gwent had the highest average payout at £34,661 over a three-year financial year period, while Cardiff council paid four people a voluntary severance of between £100,000 and £150,000 over the 2011/2012 period.

Cardiff, Wales’ largest local authority, paid out £8.6m over the past three financial years – including this year to date – to 546 members of staff.

One of the smallest councils, Merthyr Tydfil, paid out £2.3m in voluntary redundancies while Caerphilly reported no voluntary redundancies at all.

Tory leader Mr Davies, said: “These findings are quite remarkable, particularly in the context of recent complaints that councils may have to go cap in hand for lottery funding because money is so tight.

“Meanwhile, we find that across Wales local authorities have managed to spend more than £31m funding golden handshakes for departing staff.

“It’s also hard to explain the wide variation between local councils; Caerphilly have offered no voluntary redundancies whatsoever, while neighbouring Merthyr have racked up £2.3m to pay off 153 council staff in a borough of just 55,000 people.”

Mr Davies also hit out at the biggest-spending council, Cardiff, saying the payouts happened when libraries and leisure centres were closed, public toilets shut and services including the riding school targeted for budget cuts.

“Now we find that Cardiff Council have spent £8.6m buying staff out of their contracts. It was only a few months ago that we learnt that the Labour administration had spent over a million pounds taking on 10 new senior officers – do they never learn? These pay-outs are lavish and unnecessary.”

Lee Canning, the Wales director of the Taxpayers’ Alliance, said it was a “real insult” to Welsh taxpayers.

He said: “For well over a year we have heard Welsh councillors plead their case and claim that they simply don’t have any money to spend. The Welsh Government have to consider the varying funding mechanisms in place for local authorities throughout Wales.”

A WLGA spokesman said: “Far from demonstrating a ‘lavish’ approach to redundancy payments within local government in Wales, this criticism serves to emphasise a clear lack of understanding of the impacts that UK Government austerity measures are having on the local government workforce and local public services in Wales. 

“The figures compiled by the Welsh Conservatives also fail to demonstrate an understanding of comparative costs.

“The cost of voluntary redundancies within the Welsh Government during 2009-12, for example, was £50m for an organisation employing around 6,000 people. Local government in Wales on the other hand employs over 140,000 people, which should help to put this £31m figure in context.

“Due to the current financial climate, and the swingeing cuts being made to public sector spending by the UK Government, further redundancies within local government in Wales are simply unavoidable.”

Coun Russell Goodway,  Cardiff council’s Cabinet  Member for Finance, said:   “Welsh councils are being  forced to reduce the number of  people they employ as a result  of the savage cuts being imposed on local government  across England and Wales by  the Conservative/Lib Dem coalition government at Westminster, which Mr Davies  supports.

“In accordance with good  practice, Cardiff tries hard to  ensure that the reduction in job  numbers is, as far as possible,  achieved via voluntary severance rather than via the statutory scheme.

“The maximum that any employee leaving the council can  receive under the voluntary  scheme is £29,700 at £450 a  week (which equates to 66  weeks pay) compared to a  maximum of £13,500 under  the statutory scheme (which  equates to 30 weeks pay at  £450).

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