Indicative costs for Struan Lodge: were officers overegging it?

An industry insider from outwith Argyll and Bute has been looking at the best available information for us, to give some idea of whether or not the quoted costs of running Struan Lodge in Dunoon are reliable.

These figures can be no more than indicative – because neither our expert nor we can have [nor could we be given], any accurate information on the precise points on the salary scales where individual staff are currently positioned.

The staffing establishment used below has been taken from the minutes of the last full council meeting and the pay scales for the grades are publicly available.

Assumptions and methodology

We have had to make certain assumptions on grades and have based these on the figures in an advertisement for a Senior Social Care Worker in Argyll and Bute published on the myjobscotland website – and then set each post below this level on proportionately lower pay spines.

For example:

  • Senior Social Care Worker graded lge 10;
  • Social Care Worker lge 9;
  • Assistant Social Care Worker lge 8 – but could be lge 8 and lge 7 respectively or lge 9 and lge 7.
  • We graded the Manager at  lge 13. This is unlikely to be lge 14 but might be lge 12.

We have dealt with potential variations by producing four tables:

  • Table 1: using a 37 hour week for appropriate staff
  • Table 2: using a 35 hour week for these staff
  • Table 3: using a 37 hour week at one grade lower than in Table 1
  • Table 4: using a 35 hour week at one grade lower than in Table 2

We did not know where domestic and catering staff are set in the pay ranking order but, since they are usually classified as ‘manual workers’ we have graded them accordingly  – apart from ‘Cook’ – lge 5; and Domestic Supervisor  – lge 7.  [On this one, we are not sure why a domestic supervisor is needed for such a low number of employees.  We would have expected a Manager to assimilate this role.]

We have also assumed that all staff are members of the Council pension scheme and, for purposes of employers NI contributions, have assumed that no staff have opted out and all are on table A.  All the employers NI contributions have been calculated individually and run through the HMRC calculator.

The officers’ papers additionally mention ‘support services’ at a cost of £105,174. This appears very high. We would expect such services to include ‘background’ costs like HR, accounts, senior management etc – but as their responsibilities would be spread across the whole department, we struggle to see how they have come to this figure.

We would have thought a figure of £7,000 to £10,000 per annum would be nearer the mark – but it will need to be established just what ‘support services’ are included in the council officers’ high figure.

The staffing establishment

According to the minutes of the last full council meeting, the staffing establishment at Struan Lodge is: 1 x Manager, FT; 3 x Senior Social Care Workers Day Care, FT; 4 Social Care Workers Day Care, FT; 2 Assistant Social Care Workers Day Care, FT; 2 Senior Care Workers Nights, 33.5 hours; 2 Social Care Workers Nights, 33.5 hours; 1 Cook, FT; 1 Assistant Cook, FT; 1 catering assistant, FT; 1 Catering Assistant, 19.5 hours; 1 Catering Assistant, 8 hours (vacant at present); 1 Domestic Supervisor, 19.5 hours (vacant at present); 3 Domestic assistants, 19.5 hours; 1 driver/handyman, FT.

Staffing costs Model 1

This is based on using the methodology and assumptions outlined above, the given  staffing establishment, salary spine points as stated, employer pension contributions @ 19% and a 37 hour week.

  • Manager – Full time: @ lge13, annual salary £45,509, plus pension and NI contributions = annual cost of £59,399.71
  • 3 x Senior Social Care Workers Day Care – full time: @ lge 10, annual salary £31,851 x 3, plus pension and NI contributions x 3 = total annual cost of £123,788.07
  • 4 Social Care Workers Day Care – full time: @ lge 9, annual salary £27,414 x 4, plus pension and NI contributions x 4  = total annual cost of £141,482.64
  • 2 Assistant Social Care Workers Day Care – full time: @ lge 8, annual salary £24,347 x 2, plus pension and NI contributions x 2 = total annual cost of £62,577.86
  • 2 Senior Care Workers Nights – 33.5 hours: @ lge 10, annual salary £28,838 x 2, plus pension and NI contributions x 2 = total annual cost of £74,514.44
  • 2 Social Care Workers Nights – 33.5 hours: @ lge 9, annual salary £24,820 x 2, plus pension and NI contributions x 2 = total annual cost of £63,847.60
  • 1 Cook – full time: @ lge 5, annual salary £18,076, plus pension and NI contributions = annual cost of £22,962.44
  • 1 Assistant Cook – full time: @ lge 4, annual salary £16,031, plus pension and NI contributions = annual cost of £20,252.89
  • 1 Catering Assistant – full time: @ lge 3, annual salary £14,662, plus pension and NI contributions = annual cost of £18,431,78
  • 1 Catering Assistant – 19.5 hours: @ lge 3, annual salary £7,727, plus pension and NI contributions = annual cost of £9.231.13
  • 1 Catering Assistant – 8 hours (vacant at present): @ lge 3, annual salary £3,170, plus pension and NI contributions = annual cost of £3,772.30
  • 1 Domestic Supervisor – 19.5 hours (vacant at present): @ lge 7, annual salary £11,398, plus pension and NI contributions = annual cost of £14,103.62
  • 3 Domestic Assistants – 19.5 hours: @ lge 3, annual salary £7,727 x 3, plus pension and NI contributions x 3 = total annual cost of £27,693.39
  • 1 Driver/Handyman – full time: @lge 3, annual salary £14,662, plus pension and NI contributions = annual cost of £18,431.78

Total staffing costs at these grades and based on a 37 hour week = £660,489.65

Staffing costs Model 2

This is based on using the methodology and assumptions outlined above, the given  staffing establishment, salary spine points as stated, employer pension contributions @ 19% and a 35 hour week.

  • Manager – Full time: @ lge13, annual salary £43.049, plus pension and NI contributions = annual cost of £56,136.31
  • 3 x Senior Social Care Workers Day Care – full time: @lge 10, annual salary £30,129 x 3, plus pension and NI contributions x 3 = total annual cost of £116,920.53
  • 4 Social Care Workers Day Care – full time: @ lge 9, annual salary £25,932 x 4, plus pension and NI contributions x 4  = total annual cost of £133,62.324
  • 2 Assistant Social Care Workers Day Care – full time: @ lge 8, annual salary £23,030 x 2, plus pension and NI contributions x 2 = total annual cost of £59,083.40
  • 2 Senior Care Workers Nights – 33.5 hours: @ lge 10, annual salary £28,838 x 2, plus pension and NI contributions x 2 = total annual cost of £74,514.44
  • 2 Social Care Workers Nights – 33.5 hours: @ lge 9, annual salary £24,820 x 2, plus pension and NI contributions x 2 = total annual cost of £63,847.60
  • 1 Cook – full time: @ lge 5, annual salary £17,099, plus pension and NI contributions = annual cost of £21,667.81
  • 1 Assistant Cook – full time: @ lge 4, annual salary £15,165 plus pension and NI contributions = annual cost of £19,102.35
  • 1 Catering Assistant – full time: @ lge 3, annual salary £13,869, plus pension and NI contributions = annual cost of £17,380.11
  • 1 Catering Assistant – 19.5 hours: @ lge 3, annual salary £7,727, plus pension and NI contributions = annual cost of £9,231.13
  • 1 Catering Assistant – 8 hours (vacant at present): @ lge 3, annual salary £3,170, plus pension and NI contributions = annual cost of £3,772.30
  • 1 Domestic Supervisor – 19.5 hours (vacant at present): @ lge 7, annual salary £11,398, plus pension and NI contributions = annual cost of £14,103.62
  • 3 Domestic Assistants – 19.5 hours: @ lge 3, annual salary £7,727 x 3, plus pension and NI contributions x 3 = total annual cost of £27,693.39
  • 1 Driver/Handyman – full time: @lge 3, annual salary £13,869, plus pension and NI contributions = annual cost of £17,380.11

Total staffing costs at these grades and based on a 35 hour week = £634,445.42

Staffing costs Model 3

This is based on using the methodology and assumptions outlined above, the given  staffing establishment, salary spine points one grade lower than Model 1 base, employer pension contributions @ 19% and a 37 hour week.

  • Manager – Full time: @ lge12, annual salary £40.416, plus pension and NI contributions = annual cost of £52,631.04
  • 3 x Senior Social Care Workers Day Care – full time: @lge 9, annual salary £27,414 x 3, plus pension and NI contributions x 3 = total annual cost of £106,111.98
  • 4 Social Care Workers Day Care – full time: @ lge 8, annual salary £24,346 x 4, plus pension and NI contributions x 4  = total annual cost of £125.150.96
  • 2 Assistant Social Care Workers Day Care – full time: @ lge 7, annual salary £21,626 x 2, plus pension and NI contributions x 2 = total annual cost of £55,357.88
  • 2 Senior Care Workers Nights – 33.5 hours: @ lge 9, annual salary £24,820 x 2, plus pension and NI contributions x 2 = total annual cost of £63,847.60
  • 2 Social Care Workers Nights – 33.5 hours: @ lge 8, annual salary £22,043 x 2, plus pension and NI contributions x 2 = total annual cost of £56,470.34
  • 1 Cook – full time: @ lge 5lower, annual salary £18,076, plus pension and NI contributions = annual cost of £22,962.44
  • 1 Assistant Cook – full time: @ lge 4, annual salary £16,031, plus pension and NI contributions = annual cost of £20,252.89
  • 1 Catering Assistant – full time: @ lge 3, annual salary £14,662, plus pension and NI contributions = annual cost of £18,431,78
  • 1 Catering Assistant – 19.5 hours: @ lge 3, annual salary £7,727, plus pension and NI contributions = annual cost of £9.231.13
  • 1 Catering Assistant – 8 hours (vacant at present): @ lge 3, annual salary £3,170, plus pension and NI contributions = annual cost of £3,772.30
  • 1 Domestic Supervisor – 19.5 hours (vacant at present): @ lge 7, annual salary £11,398, plus pension and NI contributions = annual cost of £14,103.62
  • 3 Domestic Assistants – 19.5 hours: @ lge 3, annual salary £7,727 x 3, plus pension and NI contributions x 3 = total annual cost of £27,693.39
  • 1 Driver/Handyman – full time: @lge 3, annual salary £14,662, plus pension and NI contributions = annual cost of £18,431.78

Total staffing costs at these lower grades and based on a 37 hour week = £594,449.13

Staffing costs Model 4

This is based on using the methodology and assumptions outlined above, the given  staffing establishment, salary spine points one grade lower than Model 1 base, employer pension contributions @ 19% and a 35 hour week.

  • Manager – Full time: @ lge12, annual salary £38,232, plus pension and NI contributions = annual cost of £49,744.08
  • 3 x Senior Social Care Workers Day Care – full time: @lge 9, annual salary £25,932 x 3, plus pension and NI contributions x 3 = total annual cost of £100,209.24
  • 4 Social Care Workers Day Care – full time: @ lge 8, annual salary £23.030 x 4, plus pension and NI contributions x 4  = total annual cost of £118,166.80
  • 2 Assistant Social Care Workers Day Care – full time: @ lge 7, annual salary £20.457 x 2, plus pension and NI contributions x 2 = total annual cost of £52,263.66
  • 2 Senior Care Workers Nights – 33.5 hours: @ lge 9, annual salary £24,820 x 2, plus pension and NI contributions x 2 = total annual cost of £63,847.60
  • 2 Social Care Workers Nights – 33.5 hours: @ lge 8, annual salary £22.043 x 2, plus pension and NI contributions x 2 = total annual cost of £56,470.34
  • 1 Cook – full time: @ lge 5, annual salary £17,099, plus pension and NI contributions = annual cost of £21,667.81
  • 1 Assistant Cook – full time: @ lge 4, annual salary £15,165, plus pension and NI contributions = annual cost of £19,102.35
  • 1 Catering Assistant – full time: @ lge 3, annual salary £13,869, plus pension and NI contributions = annual cost of £17,380.11
  • 1 Catering Assistant – 19.5 hours: @ lge 3, annual salary £7,727, plus pension and NI contributions = annual cost of £9,231.13
  • 1 Catering Assistant – 8 hours (vacant at present): @ lge 3, annual salary £3,170, plus pension and NI contributions = annual cost of £3,772.30
  • 1 Domestic Supervisor – 19.5 hours (vacant at present): @ lge 7, annual salary £11,398, plus pension and NI contributions = annual cost of £14,103.62
  • 3 Domestic Assistants – 19.5 hours: @ lge 3, annual salary £7,727 x 3, plus pension and NI contributions x 3 = total annual cost of £27,693.39
  • 1 Driver/Handyman – full time: @lge 3, annual salary £13,869, plus pension and NI contributions = annual cost of £17,380.11

Total staffing costs at these lower grades and based on a 35 hour week = £571,032.54

About the results

As you will see in each of the four tables in the spreadsheet above, there can be a significant variation in total staffing costs, depending on grades, hours worked etc. Table 1 shows total costs of £660,489; where in table 4, total costs are £571,032.

However none of them come to the total of £724,306 as given in council officers’ papers as the cost of staffing at Struan Lodge.

Overall, while these figures can be indicative only, they are unlikely substantially to underestimate the reality.

However, what they do suggest is that the figures given to councillors may be flawed – and if they prove to be so, councillors will need to know how and why this has happened.

The issues

Political events have created an external issue around this matter -  which, while serious, is no more than a circumstantial relationship. No responsible person should confuse or merge these separate issues.

The core issue is the potential provision of unreliable information to councillors who have no choice but to accept it as secure and competent – at least until reason suggests otherwise, which now it may.

The second issue relates to the political conduct around the public reception of the decision based on this information.  This has seen a failure to accept the doctrine of collective responsibility amongst some SNP administration members, in an absence of political self-discipline and of sound political judgment.

The question is whether, when councillors, as they need to do, interrogate the detail of the costs given to them by council officers, they find that the savings from closing Struan Lodge differ in appreciable measure from those they had been led to believe would result.

If they do, it means that no councillor is safe in accepting without the most testing challenge, any facts and figures given to them by the staff who are paid from public funds to work for and to serve them.

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39 Responses to Indicative costs for Struan Lodge: were officers overegging it?

  1. ” Employer pension contributions 19% “. Now that IS good !! Jealous ? You bet I am. What are the employees paying ?

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  2. George – 19% is about right, and 6% by the employee.

    We are moving in the right direction in uncovering why the Struan Lodge decision is so flawed. Once we start to look at the INCOME to Struan Lodge from the many various sources, we’ll really get closer to the truth, and why £400k (it’s not actually £400k, more like £370k – a trifling? Maybe, but £30k doesn’t hang on trees!)saving is such a flawed figure, and where other issues lie with the way A&B manage care home provision.

    I’m away to eat my hat.

    :)

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    • Jamie….so I was ‘cheated’ by my employer who only contributed the same 6% as I did ! You’re telling me that 19% is ‘about right’ in all employment, everywhere ?

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  3. No, only ‘about right’ in the public sector George.

    In private sector, employer contribution of 6% is actually fairly good, so don’t feel cheated.

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      • Because about 20-25% of salary over 40 years is the cost of setting up a decent pension fund, regardless of who you work for. It’s deferred income. If you and your employer choose to pay in less in order to be able to take money out now as wage or profit, then I take it you’re both doing so with your eyes open and not kidding yourselves that you’re making proper provision. I’ve known a number of people to opt out of good schemes in the past so as to be able to do a deal and pocket the contributions, and don’t they regret it now! And if your employer won’t pay in more, there’s nothing to stop you taking some of your wage and paying it, free of tax, into an additional personal scheme.

        The bit I’d query first is that £105k paid to central “support services”. Central management charges, the apportioning of which is always a largely subjective matter, have always been a useful tool in the business of downsizing.

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        • I think you’re missing the point pm – the difference is what is often referred to as ‘gold plating’ of public pensions. These astronomical contributions are paid for by tax payers, most of whom are private sector workers who get a pitiful contribution by their employers in comparison.

          The cost is borne by the taxpayer, no-one else. Wouldn’t it be great if all employers paid 19% of our salaries into a scheme? Only in the public sector. If you want more in the private sector, it comes right out your pocket.

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          • The point you’re missing is that it comes out of the pocket of the employee regardless of who the employer is. Pensions are deferred income. Or more simply, INCOME. If you believe that the public sector rewards its employees with incomes which are excessive then I won’t argue: I have no opinion one way or the other. But 20 or so per cent is what a proper income related pension costs: that’s it. Teachers, medics, nurses, lecturers, civil servants and so on, are smart enough to understand that point, and they agree, collectively, to forego wage inome now in recognition of the crucial importance of that deferred element. If other groups of workers are too thick to understand that, well, whose fault is that?

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          • I’d be surprised if the wages of care workers in the private sector are higher than those offered at Struan House and I’d put money on the pension contribution being far less, although the new pension rules may change that to an extent.

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          • Have to laugh sometimes at folks grumping about ‘gold plated’ pensions.
            remember way back in the ‘Thatcher’ 1980′s and deregulation many superanuated workers were teased out of their superan’ schemes by ‘promises/projections of much larger rewards by taking out out private pension.
            Of course subsequently they had to transfer back to original superan’ schemes which had to be compensated accordingly.
            Similarly in these greedy years the private sector were better paid with many leaving local government. Many stayed loyal and prefered the stability of knowing how much their modest pension would be, rather than the feast or famine lottery encouraged at that time.
            Pease dont now slag of these same local authority/health service employees.

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          • Many large private companies used to have final salary schemes just like the public sector, with the companies paying a decent contribution. Gordon Brown then decided to tax them, the crunch came along, the Stock Market crashed & these companies decided to throw in the towel because they couldn’t let shareholder dividends fall. Ridding pensions ws seen as an easy option. First they closed their schemes to new employees and then they closed them altogether. Instead of everyone shouting from the rooftops they just shrugged & let it happen. Just because the publc sector didn’t follow this model their pensions are now regarded as”gold plated”. There seems to be an widely held aspiration to bring everyone DOWN to the level of these pivate companies whose attitude to their staff is poor. Our aspiration should be to bring private companies UP to the level of the public sector so that the burden on the welfare system years down the line is minimised.

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  4. oh dear the conspiracy gets worse,the above suggests all the staff are in the pension scheme,fiction..,fact!.. not all staff are in the pension scheme so therefor all the suggested tables are wrong!so the figures are wrong again as is the vacant posts,job titles and some gradings are also wrong.is it any wonder the council is in such a state,no wonder they are a laughing stock.are we the public to believe everything we read in the media and from what the council want to lead us to believe.but it would make good reading to disclose the ”suggested” tables of wages from the directors and heads of services.

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    • Come on Tila, help newsie out and give her all the facts so she can produce a table closer to the truth; she did explain that her tables were a best guess.

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      • We have given every assumption we have had to make and laid out the basis for every figure in pay scales, hours and contributions.
        Failing sight of the council’s actual accounts – this is as accurate, as transparent and as careful a reckoning as you are likely to get.

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        • yes news room you have hit the nail right on the head ‘assumption’ ‘failing sight of the actual accounts’ ‘this is as accurate’ ‘reckoning’…that seems to be all this is about , making assumptions without the actual facts.

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  5. Still padding out the costs. Again, a tactic used in the school closures.

    We discovered that our astronomic grounds costs could not be in any way shape or form be explained or verified as there was no audit trail for this. The answer we got was that it was a ballpark figure.

    They also padded out the superannuation contributions, listing it as £2000 for non-teaching staff. Funny that, our staff at that time had opted out of the scheme and weren’t paying superannuation.

    There were questions about other figures as well, so if I were the campaigners trying to save Struan Lodge, I’d go through those accounts with a fine tooth comb and ask for proof of the amounts listed.

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  6. Why doesn’t the Community Council call a public meeting (more than 20 persons need to agree) and invite the council’s chief operating officer to explain how the costs were invented/inflated —sorry scientifically calculated. I am sure the official’s and those wanting Struan to close would welcome the opportunity to provide the public with all the facts so we can agree with them.

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  7. I am curious to know what the staff at Struan Lodge do all day? The numbers would appear to be far in excess of what you might expect to be looking after 10 residents, particularly in the catering department.

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    • hi all as a previous catering manager with the local authority (prior to starting my own buisness)i worked in a similar place to the lodge which was a 15 bedded unit opposed to there 12 which had 2 day centres attached with a capacity for 20 clients which i believe is the same at lodge …special catering for meetings…25-30 community meals,similar number again …. maybe i can help shed some light on what happens within a catering dept…i had 5 staff members 1 full time catering manager(myself)1 full time assistant cook 2 part time kitchen assistants who also covered each others days off which make it a 3 man kitchen and dining room, 1 evening kitchen assistant who covered the tea time shift from 3.30 to 7.30 prepping veg and setting up for evening meal before i left at 5pm and 1 who covered her 2 days off…you can more or less exclude the catering manager as my main duties where very much office based (except for covering the assistant cooks days off) dealing with clients complex needs…meetings with dieticians,speach therapists,up-dating haccp and cook safe records..arranging in-house training for all staff, refresher hygeine courses..allergy awareness,infection control,stock ordering,staff supervisions,invoicing,payroll time sheets,staff meetings,clients meetings,seasonal menu’s,special dietry requirement menu’s and covering other facility who where short staffed,interviewing and the list goes on with plenty to fill the weeks work. the lodge may have slighty smaller numbers now with the same staff ratio but the kitchen staff cannot be blasted for the decrease in the numbers in day centres which i believe have emalgamated due to numbers decreasing or residential who can accomodate 12 clients but due to monotoriums they can have no more intakes. staff are given contracts with contracted hrs not varying hrs therefor when numbers drop the staff stay the same but the staff can be utilised and rotas altered accordingly to cover sickness periods and holiday periods without using sessional staff.i have worked in many catering establishments in my 40 yrs of being a chef and many have included management positions so my answer to ”what do catering staff do all day in the lodge” is still simply work there butt off as there is still the same job to be done it doesnt vary in duties only the numbers vary,just another point…i think its very unfair that public sector workers are being scrutinised here lets face it i left each job for better money and to move up a scale so anyone who wishes to make a better living have the same opportunity to do the same whether it be the private or public sector

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  8. Seems like a lot of feather-bedding going on to feed people; at sea we have a cook and a steward, who have to feed 25-30 people and keep the kitchen and dining area clean, and the steward also cleans the lounges and passageways. What are all the catering staff doing?

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    • db – Your final question sums up Local Government generally in my experience. One could delete the word “catering” and substitute the word “Council”.

      If you go into one of the successful businesses in Dunoon you are dealt with promptly, efficiently and politely. There is a buzz about the office, things get done quickly and the next thing you know, they have taken your money and you outside with your goods in hand (or vehicle).

      Contrast this to going into a council office where the staff are snailing about amongst piles of paper. There was a notorious council driver, often found parked up, whose claim that he was employed by the council but he did not “work” for them!

      I believe it is this inefficiient organisation and management that hamstrings local government costs in competing with private enterprise. Good managers who try to motivate the staff are accused of bullying and face massive trade union opposition.

      If places like Struan Lodge are to survive then management and staff have to be equally efficient and supply the service at a reasonable cost or their jobs will go.

      I seem to remember that when A&B Council was to be set up Dick Walsh wanted to start with a blank sheet of paper and only take on the good staff but the Government of the time (Tory?) said “No”.

      Before readers come to form any conclusions on my political views I should point out that I have worked in both the private and public sectors and even been a trade union official and my politics are left of centre. I am not castigating all local government employees just the culture that I have observed.

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  9. The wider question is why if you contribute the same amount into your pension pot over the same period as a Dutch person the Dutch man or woman will have an annual pension 50% higher than the UK citizen ?

    The reason for this is twofold. Dutch law restricts pension managers’ fees and the Dutch have independence who are not in thrall to the City of London which is the root cause of the UK’s economic problems.

    The disconnect with the rest of the UK is aptly demonstrated by the number of employees of Barclays Bank staff with annual incomes in excess of £1 million revealed today. Quite disgusting!

    How can this makes us better together?

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  10. I don’t pay into a private pension for most of the reasons Graeme mentions – I once sat down and worked out the fees over my expected lifetime and they were massive – all to push some money about? That, and the fact that a relatives pension is virtually worthless thanks to maladice/misinvestment.

    I have other plans to see my into retirement, but having modest taste in car and house definetly helps. oh, and no kids :)

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  11. As stated at my post 6 above –have a public meeting with the officials/Staff representatives and lets get to the bottom of the actual costs of Struan as opposed to the “fabricated” costs. Then we can make our own minds up.

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  12. pm – You rightly state that for anyone to hope for a decent retirement plan they should aim for about 20% of their current income to be paid towards a pension scheme, wouldn’t disagree with that. However you then appear to infer that public sector employees pay 20% of their salary towards a pension scheme, not true.

    Teachers, medics (most of whom happen to be self employed but perversely still receive the benefits of public sector pensions), nurses, lecturers etc only pay 6% of their salary towards the pension scheme, the additional 19% is paid by the tax payer (yes this also includes public sector workers but certainly not exclusively).

    Where you lost me though, how does any of that make private sector employees ‘thick’?

    An employee, whoever they are employed by, can pay whatever they like or can afford in to a pension of their choosing, and millions of private sector employees do exactly that. Unfortunately they don’t have employers who will contribute anywhere near 19% towards pension plans, they’re actually very lucky if they pay even 6% towards it. Is it because they have to contribute up to 20% of their own income that makes them so thick?

    Are you arguing that they are stupid for doing this and anyone with any intelligence should simply work in the public sector?

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    • jm, you’re not getting it – if I, whether employed or self-employed, public or private sector (it doesn’t matter a jot) elect to take a higher wage NOW rather than have the employer contribution go into a pension fund, then I would rightly expect to get a lower pension. To an employer, the cost of employment is the cost of employment, regardless of whether the money ends up in a pension fund or in a pay packet. Collectively, public sector employees have generally agreed to forego pay now (19% in the case cited) in exchange for future benefits.

      And what’s you point about the taxpayer paying? It’s deferred income. Of course the taxpayer pays, just as they pay the here-and-now wages. If you want to cut the pay, that is, the wage and pension contribution combined, of public sector employees, then say so. There are many cases towards the upper end where I’d be right behind you, but that’s a different debate.

      The real scandal is that, beginning with Thatcher and deregulation of pensions, coupled to ongoing meddling by successive governments, we have virtually destroyed occuptional pensions for employees in the UK private sector. Reckless chancellors have preferred to see the money diverted away from being tied up in long-term pension investment and out into the economy through pay packets and into the malls, SUVs and house price inflation, all at the altar of the great gods, “growth” and “feel-good”. It doesn’t feel so good when you see those penurious chickens coming home though, does it? And of course, privatisation and casualisation have both served to make things worse.

      As for “thick”, read what I said. Anyone who does not understand that by failing to make proper provision, they will inevitably suffer, can hardly be described as sharp, but it appears to be happening all around. Painful, but true. The unionised public sector has managed to hold the fort. Much as I hold no brief for unions in many ways, it’s up to others to learn from that.

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      • Absolutely, correct. Dont blame public sector employees for taking a safe lower wage/ reasonable pension approach.

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        • How do public sector wages compare with private ? An hours wages for a labourer or tradesman or secretary in both sectors ?

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          • You’re asking the right question, George. I don’t know the answer.

            Pensions form part of the rewards package of any employee and, as I have said repeatedly, a proper pension is very expensive. But griping about the fact that public sector employees have managed to retain them is a red herring and misses the key point entirely. What’s much more important is how the overall cost of employing someone compares to an accepted norm, together with the efficiency with which that person’s time is used. The split between pension cost and wage is irrelevant.

            I’ve no doubt that online data exists somewhere which can answer your question. And it’s plain to anyone with eyes to see it that too much public sector business is needlessly expensive, ineptly managed and woefully inefficient, which I take it is the point you’re getting at.

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      • pm – I must be honest and say that I still don’t quite understand certain things you appear to be saying but thats probably me and admittedly I was playing ‘devils advocate’. I do though agree with a lot of what you say. I’m not trying to knock public sector employees or their pension plans, I’ve paid in to myself for over 25 years. I just struggled with the bit about certain people being thick.

        I also agree with what you say about Thatcher and previous chancellors but unfortunately and regrettably these changes have been made and they will never return.

        Where I may possibly disagree with you is about who is to blame for the mess we are in now. Yes successive governments (and bankers and large corporates and… no wont’t go there) have contributed massively and irresponsibly towards the current state of affairs but we also have to accept that no one made us buy the SUV’s or to mortgage ourselves up to the hilt, we done that on our own.

        Ok we could go in to a great big debate on social pressure and expectations but no one was holding our hands and forcing us to sign on the dotted line when we were extending the mortgage.

        We can continue to blame anyone and everyone but I personally beleive we also have to take a collective responsibility for where we are now and start to accept that we have all played our part in contributing to the mess we are currently in.

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        • pm – ignore what I’ve said above, just realised we are probably both saying exactly the same thing. Not being very clever today.

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          • I’d say we pretty much agree, John.

            The fact is that surveys have shown repeatedly that people expect to get good pension returns from very little investment. That’s not being very clever and, to be honest, as I saw the situation develop, I’ve been infuriated at how easily people have been gulled. I believe it should have been incumbent on governments to take a lead and help to save people from themselves, and that, indeed, was the regulatory and taxation setup we used to have. Instead, they have spent three decades dismantling a world lead and it will take generations to rectify the damage already done.

            And, let’s not go there, but, yes, the much vaunted UK/Scottish financial sectors have been guilty of ripping people off in so many ways, not least in the lousy deals they’ve sold in private pensions schemes, endowments (in many cases saved for retirement) and so on ….

            And do you remember the days when companies routinely raided their pension funds (i.e., the contributions were in negative percentages!) because helpful actuaries had deemed them to be in surplus? Pure profit magicked up out of no effort, no trade. Only to have the same actuaries come back bleating years later, with the economy flagging and stock markets in reverse, that their pension fund investments are down, liabilities can’t be covered and consequently the schemes are broke. Well, no wonder! They’ve been spent!

            Rant endeth. Need to lie down now ….

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          • It’s much more useful than that; once the actuaries come up with figures pointing out the gigantic unfunded hole in the pension pot companies can easily justify closing final salary pension schemes on grounds of ‘competitiveness’. Once a few big companies did that, all the others joined in as it became ‘industry standard’ to offer only a money purchase instead.

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  13. This public sector pensions claim is total nonsense which has been banded about for far too long and picked up by the usual mischief making media. You will find some high pensions in the public sector, just as you will in the private sector with those paid to , funnily enough, the small percentage who made it to the top of the scale.

    The truth of the matter can only be considered by looking at the total picture of pensions paid to all public sector workers – i.e. not forming biased and accusatory opinion using a few headlines in the bloody Daily Mail. About 50% of public sector workers get just shy of £5,600 a year and in local government this number drops to £4000. Meanwhile public perception, as shown in a YouGov poll last year is that nearly half the population (OK I will accept that polls are not massive samples) think the average pension is over £10,000 – I wonder how that perception has developed.

    It is also worth reminding people that public sector pensions have already been cut twice in recent years. First by the previous Labour Government (through a degree of negotiation) and then secondly by the indexation switch to CPI instead of RPI – this was not subject to any negotiation or consultation, it was simply imposed.

    If people have beefs with the level of specific pensions then that is fair enough however the blanket castigation of all public sector pensions is born out of ignorance caused predominantly by spreading of misinformation by parties with a personal or corporate agenda.

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