Copying this straight across from Bookers comment section - because it is so well explained:
1 hour ago
Anyone who has faced redundancy knows it’s pretty awful and most of us will feel some sympathy for anyone finding themselves in that situation, but many of you will have heard and read about the obscene amounts of money being paid out to some senior staff made redundant from their jobs in local government.
Most of you will be surprised and possibly angered. ‘The rich get rich and the poor get poorer’, never did the words of this old song ring more true than today. Statutory redundancy pay is calculated as up to 30 weeks' pay, depending on age and length of service. The statutory weekly pay amount is limited to a maximum of £400 – presumably to protect the employer – but my council has seen fit to waive this weekly pay ceiling. Not just to be a little more generous (which may well have been acceptable to most of us), but to get rid of it altogether, and use actual weekly pay. The floodgates are well and truly open.
As far as local councils are concerned, who makes these decisions? Could it be that our elected councillors are overly influenced by the executives who benefit from them? Bearing in mind that the weekly pay of an Executive earning £150,000 per annum is getting on for £2,900, it’s not difficult to see where some of these ridiculous redundancy payments are coming from. In my council area the only limit applied is a maximum of x 30 weeks, currently enhanced to a maximum of x 40 weeks for voluntary redundancy.
This is extraordinarily generous especially when one considers it is financed by the public purse. Yes, the funds (£10 million has been set aside) may be coming from the Council’s reserves, but it should not be forgotten that this is our money, held by the Council on our behalf. The County claims that cutting management posts will save around £36 million over the next four years, so the up front costs are worth it. We say that if they had stayed even with their compulsory redundancy scheme the savings would have been substantially more.
Here is an example: Employee, 50 years old, 15 years service, salary £75K (average for a senior manager)Basic statutory scheme payment £8,000County Council’s compulsory scheme payment £28,000County Council’s enhanced voluntary scheme payment £56,000 The Leader of the Council says that this generous redundancy pay is deserved. (I fail to see why local government employees are more deserving than the rest of us.) The Scheme is open to all employees, but let’s concentrate on the 150 senior managers whom the Council is looking to lose and who are being encouraged to take advantage of this Enhanced Voluntary Redundancy Scheme. They have received very high salaries, possibly bonuses or honorariums in the recent past.
These high salaries, accompanied by an employer’s contribution to the Local Government Pension Scheme of around 19% on top of those salaries, lead to the sort of pensions most of us can only dream of, and of course, to these very high redundancy payments. If they are aged 55 or over, they will upon redundancy be entitled to the immediate, unreduced payment of LGPS benefits on top of their redundancy money.
It is being said that for those senior people who are close to retirement anyway, this could be quite a good deal. The Council, predictably, says that whatever payment they get needs to be enough not to leave them struggling. “Struggling”? We don’t think so. And let’s admit it, how many of us – in their shoes – wouldn’t be jostling for a place in the queue?
I am contributing to this out of my pension as all other council taxpayers and income tax payers do from their often meagre salaries. The claim that the public sector is lower paid than the private sector is now something that no longer applies and hasn’t done so for many years – and yet the terms and conditions of employment give them the cream, while we, the employer, in many cases go without. Isn’t it about time that the tax payer is given some protection from a public sector eager only to please its own employees?
The Council says that this money is available because of savings made over the years. Good financial management, saving for a rainy day. Yes, Isitfair acknowledges this. But we find it very difficult to agree this is the best way of using money that may soon, in these hard times, be needed elsewhere.
So, at a time when we are supposed to be cutting back, the only excuse we can gain from the councils is that the payments are being made from savings, and, wait for it, that their package is not so generous as the next council, or as the Civil Service or the NHS. WHAT? Whichever way you look at it, the money is coming from your pocket. Try telling that to the councillors. Most of them (and possibly their executives) can spin for England and if you are not careful they will have you believing that they are right.
And remember, this is not happening in just one council, it is happening all over the country.
Councillors must take this opportunity to renegotiate terms of redundancy either with staff or unions, never again must this preferential treatment, because that is exactly what it is, be allowed to cost the council tax payer and the tax payer a small fortune.
To give them more power to their elbow we suggest that the government take urgent steps to amend the legislation which has enabled the floodgates to be opened - Early Termination of Employment (Discretionary Compensation) (England and Wales) Regulations 2006. Please don’t tell us this isn’t possible, Mr Pickles, we’re sure you can find a way. No such word as “can’t”.
Incidentally, many of our members have contacted us on this subject, most of them asking the same question. If the Council is in a position to make these people redundant now, why were they employed in the first place? And being rather cynical, how many of these redundant senior managers will turn up as consultants in a few months time?"