Bamboozled by officers again: council approves redundancy payment outside the rules

A member of staff in Amenity Services at Argyll and Bute Council was offered and voluntarily accepted redundancy and a redundancy payment.

That payment was approved at the last meeting of the council.

The information put before the council to approve was simply that the total saving made over a 3 year period by granting this employee voluntary redundancy is £67,785.00 and the cost to the Council is £78,623.43.

The council has a rule that requires a payback period of less than three years for any voluntary redundancy.

This carefully phrased statement – to largely less than comfortably numerate  councilors – glides over the fact that the payment breaches the rule by an excess amount of £10,838.43 – 15.9% more than can be paid back in three years.

Strategic Finance is now the only responsibilty retained to herself by the Chief Executive, Sally Loudon, so presumably this move was put through the council under her aegis?

It has long been noticeable that too many councillors in Argyll and Bute Council have a real problem where numbers are concerned – and this is another example of it.

They don’t even know when they are approving breaches of their own council’s rules.

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12 Responses to Bamboozled by officers again: council approves redundancy payment outside the rules

  1. Given the vast salaries both the Councillors and staff are paid, why is nobody pointing this out and stopping this happening? This is taxpayers money they are supposed to be looking after. Is there no body out there that this can be reported to? All the Councillors involved in this vote should be held responsible and have the nearly £11.000 deducted from their salaries! They wouldn’t break their own rules in a hurry again.

    Hot debate. What do you think? Thumb up 14 Thumb down 3

    • Breaking the rules might work two ways – what would happen if you withheld the balance of your council tax until the council recovered the money that they’ve overpaid – our money?

      Hot debate. What do you think? Thumb up 14 Thumb down 3

      • You’d get the gaol. Councillors probably get tea and biscuits. I like the idea of titheing their salaries to pay back the discrepancy.

        Like or Dislike: Thumb up 11 Thumb down 3

    • If the salary over 3 years is £67785 and assuming it’s a full time worker then that equates to £22595 per year – not bad but hardly vast. The cost savings should include all wages charges(e.g. “gold plated pension”) and not just salary. These charges are generally about 30% of salary. That means that the salary paid to the employee would be £17381 per year – not a vast salary, Dunoonlad. It would be interesting to see the reference documents for this item Newsroom so we can put it into perspective.

      Like or Dislike: Thumb up 8 Thumb down 3

  2. This all just gets worse, there is much more effort put into how much they can draw off the top at what seems to be every situation poss.

    I would not be shock anymore if I woke up one day to read it had all just been split 36 ways but thinking about it that would only three ways in reality actual reality that is ?

    Oh well on to the next mess

    Like or Dislike: Thumb up 6 Thumb down 5

  3. A £78,623 redundancy payment is huge. Suggests a senior long term staff member. Has he already been re-employed by Argyll & Bute Council or is he now a consultant to the council?

    Hot debate. What do you think? Thumb up 10 Thumb down 5

    • If the figures quoted in this article are indeed correct then it would appear that there has been a departure from the normal procedure. The figures for the last financial year are summarised here & the averages bear little resemblance to those quoted above.
      In summary “There have been 104 redundancies, including early retirements, in
      the period 1 April 2012 to 31 March 2013 at a one-off cost of
      £1,996,547 and an annual ongoing cost of £22,744. The annual
      salary savings achieved are £1,645,191. The cost of the
      redundancies will be recouped within a 1.21 year period.” and “This is equal to an overall average
      cost of £19,198. There were a total of 52 employees who could
      access their pension at a total cost of £1,537,211 and average cost
      of £29,562. The ongoing annual cost of these is £22,744. There
      were 52 employees who received a redundancy payment only at a
      total cost of £459,336 and an average cost of £8,833.”
      As I said above it would be interesting to see the reference documents for this item from Newsroom so we can put it into perspective as there seems to be some discrepancy.

      Like or Dislike: Thumb up 7 Thumb down 3

    • If it had been a “senior long term staff member” then the council’s own Pensions Discretionary Policy, if as in the link provided by Keith Stanger, would have allowed for a payment very much greater than that quoted here, up to somewhere on the order of £400,000, if an individual on one of the top salaries had been the beneficiary.

      If you think that’s a fairy tale, have a look through this, and note the multi-hundred thousand contributions to pension schemes in severance packages in particular:

      As KS points out, the person this award was made to would have been in a fairly low paid position, but they must have already built up probably 35+ years of pension contributions. Paradoxically, that’s the bit that makes it very expensive to let them retire: they’ve paid so much into the scheme already that the cost of letting them go even a very few years early is massively amplified.

      Like or Dislike: Thumb up 3 Thumb down 2

  4. This in the same week details emerged that the boss of quango Historic Scotland received a payout from the taxpayer of £300,000 plus index linked pension for life after only 30 months in the job , a situation described by First Minister Alex Salmond as “natural justice”

    Like or Dislike: Thumb up 5 Thumb down 6

  5. @keith ~ I understand that it is not a huge salary involved here. The huge issue here is, that Councillors are voting for decisions that are against their own rules. If nobody in the council have told them about this, then something is far wrong with how the council works, and needs sorted. If they knew that they were breaking council rules, then they should be held responsible, financially if need be. We should all remember that these elected Councillors have responsibility for a budget of how many millions of tax payers money? Yes, in reality one redundancy payment is a small decision, but if they cannot get this small decision correct, what chance do the residents of Argyll and the Islands have with other issues such as schools and social work? Councillors and staff must all work within the rules, as after all, we have voted and employed them to look after the affairs of the areas we live in. If they continue to break the rules, they should be dismissed as they would be in any company, which the council basically is now.

    Like or Dislike: Thumb up 6 Thumb down 2

    • They’re not breaking any “rule”: that’s FA-speak for what’s being done and quite misleading, unfortunately. What they have is a POLICY, set by the Council itself, the policy sets the boundaries within which council officials have discretion to approve redundancy/retirement packages, and this particular case, falling outside the boundary, is referred back up to the Council for rejection or approval.

      Far be it from me to jump to the defence of A&BC but this is not a big deal.

      Like or Dislike: Thumb up 6 Thumb down 4

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