Redundancy bill emerges for Lancashire County Council and Preston, South Ribble and Chorley councils, as hundreds of local authority staff depart in a year
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Newly-published nationwide data from the Department for Levelling Up, Housing and Communities revealed the bill for payouts made by County Hall during the year to March 2023.
Central Lancashire’s district councils – Preston, Chorley and South Ribble – let almost two dozen staff go in that period, with Chorley having the highest average redundancy settlement, at £19,000, and South Ribble spending the most of the trio overall: £142,000.
The national figures have prompted a call from the Local Government Association (LGA) for a rethink of Treasury funding for councils to combat what the organisation describes as “severe budget pressures”.
A total of 221 people were made redundant by Lancashire County Council during 2022/23 – with each package worth an average of £6,000.
Redundancies increased by 55 percent at the authority, up from 142 the year before, when the staff exit bill was £521,000.
However, last year’s departure costs were dwarfed by those encountered back in 2020, when the county council spent almost £2.5m on settlements.
A County Hall spokesperson said of the 2022/23 payouts: “Delivering the best services at the best value for money for our residents is our priority.
“Like every large organisation, the way we provide our services evolves and changes over time and in all cases we must adapt to reflect changes in service need.
“Redundancies are a last option and we follow a robust procedure to ensure the business benefits of any such decisions are realised.”
Earlier this year, county council deputy leader Alan Vincent told the Lancashire Post that the authority was finding it difficult to recruit the new staff that it needed for roles that were waiting to be filled.
He revealed that County Hall was working with Lancashire’s 12 district authorities to see if they could work together to reduce the impact of a fall in the number of people in the jobs market since the pandemic struck.
At Preston City Council during the last financial year, the town hall spent £76,000 to make six staff members redundant. The average value of each of the settlements was £13,000.
There has been a significant drop in the annual redundancy bill faced by the authority in recent years – down from £229,000 in 2020 to £84,000 12 months later.
Jackie Wilding, director of resources at the city council, told the LDRS that three voluntary redundancies had been made last year, but went on to explain: “One person had two jobs, so this was classed as four voluntary redundancies.
“These were in The Harris and were part of the restructure regarding the Harris reimagining scheme, especially with the building closing for renovation works.
“However, once the project is nearing completion next year, we plan to create new opportunities at The Harris,” Ms. Wilding added.
The council also made two ex-gratia payments – goodwill gestures when a contract is terminated, beyond what is legally required – details of which are confidential, the Post understands.
In South Ribble, the total cost of redundancies at the borough council in 2022/23 was £142,000, as a result of nine staff members departing. The average payout was £16,000.
During the previous 12-month period, 16 redundancies were made at a cost of £342,000 and back in 2020, the exit bill £194,000.
Meanwhile, in neighbouring Chorley, six workers were ushered out in the year to March 2023 – at an average cost of £19,000 each.
However, that was less than half the tally of 15 redundancies the year before, when payouts totalled £213,000, and well down on the 2020 redundancy bill of £338,000.
Speaking about the departures at the neighbouring authorities, Chris Sinnott, the joint chief executive of South Ribble and Chorley councils said that the pair – which share a number of back office functions – are “committed to keeping redundancies to an absolute minimum”.
He added: “We’re dedicated to retaining talented people, focusing on staff training and development. If redundancies are to be made, it is after careful consideration and in line with our contractual obligations.
“Reductions in government funding is a risk to us – as with all local authorities – and recruitment into certain services can be challenging. We have measures in place, however, to mitigate this risk.
“One prime example of this is our commitment to making savings through our shared services model. Over 50 percent of the workforce across both councils is now shared, providing significant cost savings to both authorities while adding resilience right across our staff structure,” Mr. Sinnott added.
According to a report presented to a recent meeting of the Chorley and South Ribble shared services committee, the integration between the two has saved £1.6m – £900,000 at the former and £700,000 at the latter.
TOUGH AT THE TOP
Department for Levelling Up, Housing and Communities data – analysed by the Press Association – shows that 325 senior local authority employees were made redundant last year, an increase of 70 on the previous 12 months.
Together they received a total of £28 million – at an average of £85,000 each.
However, Ian Miller, honorary secretary of the Association of Local Authority Chief Executives, said payouts to top council staff were significantly lower than those to senior civil servants.
“Council funding has not kept pace with inflation and demand for services. The figures demonstrate how senior staff continue to lose their jobs because of the need to find savings”, he said.
“The cost of the average exit package for senior staff has fallen significantly in absolute and real terms since 2015.”
“The £85,000 cost of the average exit package for senior staff in local government pales into insignificance compared to the £335,000 paid to Sir Tom Scholar when he was sacked as Permanent Secretary of HM Treasury.”
Nationally during 2022/23, over £185 million was spent on staff redundancies by councils across England, the lowest annual amount in nine years. The number of staff taking redundancy also hit the lowest point since 2014, with around 7,800 exit packages agreed, at an average cost of £23,000.
TAKING ON AND LAYING OFF
A senior Local Government Association (LGA) figure says local authorities face a challenge in recruitment as significant as that of managing redundancies.
Cllr Pete Marland, chair of the LGA’s Resources Board, said that “getting the right people into the right roles” – including in children’s services, adult social care and planning – was tough.
That difficulty came against the backdrop of an “increasing demand for services”, he said.
As the Post reported in February, Lancashire County Council has been experiencing similar issues.
The authority’s Conservative deputy leader, Alan Vincent, said that it had problems “getting enough people to do all the things that we would like to do”.
He said that councils needed to make the roles on offer “as attractive as we can”, but speculated that some workers may simply be fed up with public-facing posts.
County Cllr Vincent also acknowledged that “digitalisation” would take certain jobs out of the local authority system.
Speaking in his LGA capacity, Cllr Marland – the Labour leader of Milton Keynes City Council, said that the association’s workforce survey showed that 94 percent of local authorities were experiencing “recruitment and retention difficulties”.
He added: “Only long-term, consistent funding from central government will be enough to meet inflationary pressures and the rising costs of the National Living Wage – on top of increasing energy and other costs – if we are to avoid more redundancies and prevent exacerbating an already acute capacity crisis in some areas.”
When the government announced this year’s near £60bn financial settlement for local authorities in February, it highlighted the fact that it was a 9.4 percent – or £5.1bn – increase on the cash pot provided to councils in 2022/23.
The budget would ensure that the most relatively deprived areas of England received 17 percent more funding per household than the least deprived, Whitehall said.
At the time, Levelling Up Secretary Michael Gove commented: “Every day councils across the country deliver for their communities and play a crucial role in driving forward levelling up.
“This funding package represents an increase of over nine percent for councils on last year, ensuring a fair deal for local government that reflects the vital work councils do to provide key services on which we all rely.”