The cost of redundancy

We know that councils are shedding staff but we now know how much it is costing.

Figures obtained by BBC Wales show the redundancy bills for the 22 local authorities were more than £30m in the past financial year.

That's a rise of 78%. Over the past three years the redundancy bill is nearly £80m.

But in a way it's not a surprise because more people are being made redundant.

We've contacted all 22 councils, so far half have come back and they say their head counts have been reduced by around 1,500.

So the overall figure is likely to be around 2,500 to 3,000, which means the average payout is around £12,000.

Those are hardly extravagant sums, and the Welsh Local Government Association has a point when it says council workers are the poor relations when it comes to redundancy payments.

Blaenau Gwent council, for example, pays people who are taking voluntary redundancy a fortnight's wages for every year they've worked.

In the civil service that same payment equates to a month's salary.

But one question is the extent to which the money is being shared out.

For example, I've been looking at the statement of accounts for Blaenau Gwent council.

In 2012/13 the total cost of exit packages came to £2.6m.

Of that, around £1m went to around 100 people, the rest went to just 25 people, including £490,000 which was shared between four people.

Blaenau Gwent council has now changed its rules governing redundancy payouts, so that the lump sums will be smaller if someone has access to their pension.


The question the likes of the Taxpayers Alliance will ask is why those guidelines are being changed now, after a three year period in which the local authority has shed more than 400 workers at a cost of £7m.

Blaenau Gwent council says these were decisions made at a difficult time to balance the books.

It says that while there is a big hit in year one, there are savings to be made in future.

This is going to be an increasingly big issue in future, particularly if the Welsh government is successful in re-organising local authorities, and large numbers of senior managers are made redundant.

How much they are paid when finances are so tight will be a sensitive matter.

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