Chief at cash strapped Norfolk council offered £100,000 pay off
10:20 27 October 2012
There was outrage today after it emerged a senior bureaucrat thought to be on the brink of retirement from a cash-strapped Norfolk council could be handed a £100,000 pay-off.
Staff at Great Yarmouth Borough Council are still reeling after management announced money at the authority was so tight, 55 employees would have to be made redundant.
But at the same time the authority’s managing director Richard Packham, earning around £110,000 a year, has been offered a six-figure severance payment.
Because he is over 60 and could simply retire from his role, taking a lucrative public sector pension with him at no extra cost to the taxpayer, Mr Packham would not normally qualify for such a hand-out.
However, a payment can be made for “efficiency reasons” and a senior management team restructuring is now being planned which would fulfil that condition.
Conservative group leader at Great Yarmouth Ron Hanton slammed the move. He said: “The council are cash-strapped.
“They have spent a great deal of time saying how they have to save all this money, how there is a shortfall in the budget and here they are thinking about giving away a large sum to an employee needlessly.
“You are either hard-up or you have money. If you are making redundancies and going on about how you don’t have any money, where do you get off suddenly giving someone a six-figure pay out? It’s just odd.”
Currently at the council there is a managing director, a deputy managing director and several junior directors.
But under the planned restructuring this would be changed to one chief executive and three directors; an efficiency saving the council says justifies Mr Packham’s severance payment.
The news comes as concern mounts about the on-going financial viability of Great Yarmouth. The council was granted money from a Whitehall “transition fund” two years ago to help it plan for decreasing central government income.
But with the fund now ending, there is still a hole in the authority’s budget; it must make £3.2m in savings every year for the next three years to make ends meet.
The redundancy programme is meant to be saving the council a third of that money with savings also needed elsewhere; further redundancies from the council’s 422 strong workforce have not been ruled out.
Its difficulties have left the authority on a list of around a dozen UK authorities that ministers fear may be at serious risk when the transition fund dries up.
Conservative Great Yarmouth MP and minister for local government Brandon Lewis said: “I’m flabbergasted. They said they didn’t want to share services with other councils which would have saved them money, but they didn’t do their maths and now they’re in trouble.
“Now they say they’re considering paying over £100,000 to a managing director that is on the point of retiring anyway.
“If they want to restructure, fine; they should do that when he retires. But to pay him off when he’s about to retire anyway would be unbelievable, and taxpayers are going to think so too.”
After hearing about Mr Packham’s severance offer, John Glen, PPS to communities secretary Eric Pickles said: “This is typical of Labour councils who see nothing wrong with raiding the public purse and shelling out eye watering amounts of cash to their cronies.”
However, the authority hit back, claiming that in the long-run the move would save money.
Before the May 2012 elections, the council was due to undertake a service-sharing agreement with two other authorities to save money, a move which would have seen Mr Packham replaced.
But after the election the plan was scrapped by the new Labour administration and Mr Packham was asked to stay on until March 2013.
However, a spokesman said that as there is no compulsory retirement age, Mr Packham might have chosen to stay longer, for the “foreseeable future”.
So in order to reduce the size of the management in the next three years when savings were needed, the spokesman said it was necessary to offer Mr Packham the one-off severance payment now.
If the proposals are approved by the cabinet on November 21 and by full council six days later, the new “chief executive” role will be taken on by deputy managing director Jane Ratcliffe or one of the other remaining directors.
Bernard Williamson, the council’s Labour cabinet member for transformation, said: “A proposed restructuring, which includes the deletion of three senior manager posts will make a significant contribution towards the £10m pounds saving we need to make within the next three years.
“As a cash-strapped council we cannot afford to sit back and do nothing.”
Mr Williamson added: “We would like to publicly thank Richard for all his hard work and dedication during his time as chief executive and managing director.”