Meeting documents
Executive (I)
Tuesday, 22nd October, 2013
| REPORT TO: | 10 |
| DECISION NUMBER: | PH/107/2013 |
| EARLIEST DATE FOR DECISION: | 22nd October 2013 |
INTRODUCTION OF A TEMPORARY VOLUNTARY REDUNDANCY INCENTIVE | |
| Matter for Consideration: In February 2014, the Council will be required to set a budget that delivers savings of approximately 16 million pounds. In order to achieve this saving it is estimated that approximately 250 redundancies will be required. The Council’s Redundancy Policy seeks to encourage voluntary redundancy as a means of avoiding compulsory redundancies. However, over the last three years the Council has made over 600 staff redundant and it is becoming more and more difficult in this climate to encourage voluntary redundancies. This proposal to temporarily amend the Council's Voluntary Redundancy Policy is designed to incentivise staff to voluntarily come forward for redundancy selection by offering them an improved financial package which will only be available for a short period of time. | |
| Information: Since the Comprehensive Spending Review commenced in 2010, the Council has seen a reduction of 52 million pounds in its budget and as a result the staffing levels have fallen from 3411 full time equivalents to 2591 full time equivalents. During this period over 656 employees have been made redundant and 427 of those have been volunteers. It is getting increasingly difficult however to encourage voluntary redundancy given the difficulty in obtaining alternative employment in Blackpool. One way of encouraging volunteers is to increase the financial offer to employees who come forward in order that they have greater financial resilience to allow them time to seek alternative employment. A number of employers already incentivise voluntary redundancy as it is a way of ensuring better outcomes for all and quite often this is achieved by applying a multiplier to the redundancy payments due to employees. The proposal in Blackpool Council however is to incentivise voluntary redundancies by offering a flat rate of £5,000 to most employees entitled to a redundancy payment who come forward regardless of their salary. This figure would be pro-rata for part time staff. It is further proposed however, that this additional money is not made available to employees who would be in receipt of their local government pension as a consequence of redundancy. Employees in this position usually attract the payment of pension strain by the Authority and they are therefore already incentivised financially to come forward for consideration. It must be noted that not all requests for voluntary redundancy can be accepted by the Council. They may only be accepted where the post they occupy can genuinely be removed or reduced from the establishment or where an employee who would be at risk of redundancy can be moved into the post the volunteer seeks to leave (this is called a 'bump redundancy'). All requests for voluntary redundancy will be dealt with by a redundancy panel chaired by the Chief Executive. It is hoped that by offering this additional incentive more individuals will come forward and volunteer for redundancy, that they will have greater resilience to enable them to find suitable alternative employment in the future and that it will allow for a speedier determination of redundant posts which will ensure that savings are realised as early as possible. This will impact on the full year budget savings targets more quickly and effectively and reduce the numbers of groups of staff who are 'at risk' of redundancy. | |
| Does the information submitted include any exempt information? | NO |
| Legal Considerations: Legal advice has been taken regarding this proposal and the Council is able to offer this incentive for a limited period without breaching any employment law. | |
| Personnel Considerations: The proposal meets all employment law provisions and is in line with the Council's stated intention in its Redundancy Policy to act to reduce compulsory redundancies. The use of a flat rate incentive is designed to support all employees consistently. At the moment only those employees in receipt of their pension receive any additional financial support other than the statutory redundancy pay and this move is designed to support those who are not in that category in a consistent manner. The impact of all budget reductions on the workforce composition is monitored closely by the Councils Equalities Officer. | |
| Financial Considerations: It is difficult to estimate the number of employees that will come forward and be eligible for this payment and of those how many of them will be part time. Further it is anticipated that any additional cost would be offset by speedier resolution of the redundancy processes. Redundancy costs are paid for through the Potential Pay Liabilities earmarked reserve. | |
| Performance Management Considerations: Performance management issues and the continued provision of services will need to be addressed by the Redundancy Panel when considering applications. | |
| Risk Management Considerations: This process will reduce the risk of complaints for unfair selection for redundancy to employment tribunals. The incentive will speed up the redundancy process and careful management of handover arrangements will be important to mitigate the risk of failures in processes. | |
| Relevant Officer: Carmel McKeogh, Deputy Chief Executive, HR Communications and Engagement | |
| Relevant Cabinet Member: Councillor S. Blackburn | |
| Consultation Undertaken: The introduction of an incentive scheme has been the subject of consultation with the Trades Unions and is seen as a positive way of reducing the number of compulsory redundancies in the current difficult financial climate. | |
| Background Papers: None | |
| Is this a key decision? | NO |
| Is the decision required in less than 5 days? | NO |
| Recommendations: 1) To approve the temporary amendment to the Council's Voluntary Redundancy Policy and allow the payment of an additional £5,000 (pro-rata for part time staff) to all employees who qualify for a redundancy payment provided they volunteer within a 6 week period to be determined by the Deputy Chief Executive, following approval of the proposal. Notices will be issued to staff whose voluntary requests are accepted in December. 2) That this additional money is not made available to employees who would be in receipt of their local government pension as a consequence of redundancy. | |
| Reasons for Recommendations: To allow the Council to satisfy its obligation to avoid compulsory redundancies. | |
| Is the recommendation contrary to a plan or strategy adopted or approved by the Council? | NO |
| Is the recommendation in accordance with the Council’s approved Budget? | YES |
| Other alternative options to be considered: The options that have been considered are: Applying a multiplier to the existing redundancy payments, however this was rejected on the grounds that it encourages those who are already getting the largest payouts to come forward. Retaining the current arrangements which has been rejected as it becomes increasingly difficult to attract volunteers at all levels of the organisation. | |
| Policy, Overview, and Scrutiny Committee Chairman (where appropriate) Date Informed: N/A Date Approved: N/A | |
| DECLARATION(S) OF INTEREST (if applicable) None | |
| Decision: The Leader of the Council agreed the recommendations as outlined above namely: 1) To approve the temporary amendment to the Council's Voluntary Redundancy Policy and allow the payment of an additional £5,000 (pro-rata for part time staff) to all employees who qualify for a redundancy payment provided they volunteer within a 6 week period to be determined by the Deputy Chief Executive, following approval of the proposal. Notices will be issued to staff whose voluntary requests are accepted in December. 2) That this additional money is not made available to employees who would be in receipt of their local government pension as a consequence of redundancy. | |
| Date: | 22nd October 2013 |
| Reason for Decision: To allow the Council to satisfy its obligation to avoid compulsory redundancies. | |
Date of Publication: | 22nd October 2013 |
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