Labour hits out over £18m redundancy bill

Lib-Dems counter: all we get is evasion

Oldham Council’s Lib-Dem administration has been slated by Labour for planning £25 million budget cuts next year — but spending £18 million to make almost 700 staff redundant.

The money is made up of redundancy pay, pensions, and any enhancements.

The council is asking the Government to capitalise the money, a form of permission to borrow, over three years at £6 million a year.

Councillors were warned in October that up to 800 redundancies could be needed, but figures from the Lib-Dem administration’s budget plans show that it could lower at 693 full-time equivalent posts, the rest from staff turnover and vacancies.

The council also capitalised £14 million worth of redundancy and pensions payment in 2008/9, when Labour was in power. Councillor Jim McMahon, the Labour Opposition leader, said Oldham’s Lib-Dem/Tory coalition was making a ‘cap in hand’ appeal to Government, and added: “Doubt has been cast on whether the Government will sign off the repayment plan, meaning the council may have to find all, or part, of the £18 million in one go.”

He added: “The cost of redundancy is huge and a false economy.

“We are still paying today for those members of staff made redundant years ago and unless we break the cycle, we will never step back from the brink.” He said the council was paying £6 million over the cost of statutory redundancy to “sweeten the pill” and added: “Surely the council should be focused on getting a grip of the budget crisis rather than continuing the cycle of debt and redundancies?”

But Councillor Lynne Thompson, cabinet member for performance and value for money, said: “Every council in the country is looking for savings.

“It is simply dishonest to claim he can find £25 million of savings without reducing staff, when payroll costs account for 44p in every pound the council spends.

“Maybe he is planning to raise the council tax by 25 per cent?

“I have challenged Councillor McMahon twice to come clean about his budget plans and all I get is evasion.

“Capitalisation is the normal way councils and companies meet the costs of reducing staff.

“You invest once from your capital pot to make revenue savings, permanent savings, in what you spend every year.

“So that’s £18 million once to save £25 million a year forever.

“Councillor McMahon and his Labour friends are sitting in a very large and very fragile glasshouse. They should learn about throwing stones.”

Wendy Bradbury, secretary of Oldham Unison, the local authority union, said: “£18 million is the cost of making so many people redundant, and it is not 800 people but full time equivalent posts —and with part time working that could be 1,000 jobs at least.”