Leeds authority spends tens of millions on redundancy payments for almost a thousand job cuts

Leeds City Council spent tens of millions on redundancy payments for almost a thousand staff members new figures have revealed.

Thursday, 19th August 2021, 4:45 am

Figures from the Ministry of Housing, Communities and Local Government show 913 exit packages, totalling £43.2m were awarded by Leeds City Council in 2020-21.

There were 214 staff laid off the previous year, at a cost of £3.9m.

The total value of exit packages nationally more than halved from £544m in 2016-17 to £252m last year in real terms.

Sign up to our daily newsletter

The i newsletter cut through the noise

Leeds City Council has spent millions on job exit payments.

The Association of Local Authority Chief Executives and Senior Managers said job losses will continue across England because the government does not see local councils as a priority.

Ian Miller, honorary secretary of the ALACE, said: "The higher spend between 2014 and 2017 reflects that councils were making very significant reductions in their workforce at that time as a result of the Government's austerity programme which has cut funding for local government since 2010.

"Job cuts will continue because local government has not been a priority for this or previous governments."

He added that councils aim to protect frontline services, and that workforce reductions slowed in 2020-21 because the focus was on responding to the pandemic.

Since 2014-15, the average cost of exit payments has risen by 31 per cent for senior employees – when adjusted for inflation – and 15 per cent for those below this level.

Mr Miller said costs for older employees tend to be higher as the local government pension scheme requires immediate payment of pension rights where someone over 55 is made redundant, or let go to make the council run more efficiently.

The figures were published as part of the Government's research into ending "excessively high" exit payments in the public sector.

Legislation passed last year – which capped payments at £95,000 – was revoked in February after the Government admitted it may have had "unintended consequences" for the lowest paid workers.

Mr Miller said the figures show there is no need for a cap when the average exit payment is just £26,703.

The average cost of all exit packages in Leeds last year was much higher, at £47,325 – up from £18,431 in 2019-20.

Read More

Read More
£87m of cuts and 791 job losses as Leeds Council passes latest budget

It said council restructures tend to be focused on removing senior posts, which means older, longer-serving and higher paid staff are often the ones affected – and these workers are also more likely to volunteer for redundancy.

An LGA spokesman said: "Councils are required to ensure termination payments are fair, proportionate, lawful and provide value for money for the taxpayer."

The MHCLG said councils are best placed to make decisions, but that the Government is still committed to tackling excessive exit payments.

An MHCLG spokeswoman added: “Severance pay is the responsibility of individual councils and we urge them to ensure that payments reflect value for money to the taxpayers who fund them.”