How Norfolk County Council spent more than £30m on redundancy payments in just five years
- Credit: Simon Finlay
More than £30m has been handed out in pay-offs to staff at Norfolk County Council in the past five years, an investigation into public sector finances has found.
Some 2,343 outgoing members of staff at County Hall received exit packages between 2010/11 and 2014/15 in a bid to reduce its wage bill. Last year, the council reduced its overall budget spend by £69million.
The majority of payouts were under £20,000 in value, however during the five years, 17 members of staff recouped between £80-100,000 and ten a six-figure sum, two of them over £150,000.
The Department for Communities and Local Government said it was planning to impose a £95,000 a cap on public sector payoffs.
The settlements came during a time of upheaval with hundred of jobs slashed at County Hall to cope with reductions in the amount of money it receives from the government. Redundancies are seen as an effective way of trimming the wage bill in the long term, but they come with an initial high cost.
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A council spokesman said the payments had helped them to reduce annual employee costs from £698m in 2010/11 to £519m in the latest financial year. He said exit payments above £100,000 have to be approved by full council, and none had been put forward since 2013 when that rule was introduced.
He explained that entitlement changes in 2011 had brought down costs, adding: 'In recent years our number of senior managers has fallen, performance pay has been ended and redundancy payments reduced. We will continue to adapt to reductions in Government support by providing good quality services which provide value for money for council taxpayers.'
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The amount someone receives is determined by an individual's salary, their age, their years of continuous service and whether they are eligible to receive pension benefits.
The highest year for payouts was 2011/12 when 791 people were made redundant to cope with a £60m budget cut.
In that time the number of people employed by County Hall has fallen significantly, but our findings show figures for the number of high earners have remained the same.
The council employed 35 people on £80,000 or more in 2008/09 and the same in 2014/15. The 2014/15 figure rose considerably from 2013/14, however, when 27 people were on £80,000 or more. At the same time those on £100,000-plus increased from nine in 2013/14 to 13 in 2014/15.
The spokesman said: 'One reason is that in 2013/14 several officers were not in the job for the full year, so did not get the full year's salary. We have not increased the number of senior posts. Posts with a maximum salary of £100,000 or more is now 14, it was 15 in 2013.'
Although the identity of those who receive payouts is not normally revealed, annual accounts show that upon leaving the council in 2013, chief executive David White received £163,700 compensation for loss of office, on top of a £205,300 salary and £31,800 employer pension contributions, equating to a £400,000-plus annual package. Between 2008/9 and 2013 he had received £37,000 in bonuses.
Meanwhile, Lisa Christensen, who stood down as director of children's services in July 2013 after it was classed as failing, was also earmarked £145,400 compensation for loss of office. £122,000 of that was paid into the Norfolk Pension Fund and not received by Ms Christensen.
In 2008/09, the basic salary of the chief executive was £205,300. The top job at County Hall is now the managing director role, which paid £180-184,999 in 2014/15 – a major reduction.
It does, however, pay to carry out an interim role at the authority. The government has urged against these being used wherever possible, as they are costly and can hold back long-term planning.
The highest earner at the council in 2014/15 was Sheila Lock, who as interim executive director of children's services received £259,800, a role which paid £139,500 when performed by Ms Christensen a year earlier.
The head of finance role paid £103,800 in 2010/11 but in 2014/15 the interim executive director of finance received £182,300,
Meanwhile, in 2014/15 the interim director of communities and environment received £210,400 for 11 months work (£19,127 a month), but when properly in post he was paid £11,600 for one months work.
The authority said interims were 'occasionally brought in because they have particular expertise which is needed urgently or because of difficultuies recruiting in the normal way.' They said the pay is often the fee which goes to the agency, rather than the individual.
A Freedom of Information request showed Norfolk County Council had nine people earning £50,000-plus but working off the payroll and having done so for more than three months. Off-payroll positions are those where the employee is paid via an intermediary company.
The House of Commons' committee of public accounts warned against this practice, which it said 'generates suspicions of complicity in tax avoidance … fails to meet the standards expected of public officials'.