Cash-strapped council gives bosses £13m in pay-off deal

A CULL of senior managers at Scotland's biggest city council will result in 103 executives each receiving £128,000 in pay-offs and payments to their pension funds, it emerged yesterday.

• Glasgow council leader Gordon Matheson has warned of 180m budget savings Picture: Robert Perry

A 13 million pot has been set aside to get rid of managers at Glasgow City Council, who are on annual salaries of at least 45,000 and are in their 50s.

The redundancy deal is part of a 127m voluntary redundancy package to lay off 2,600 workers from the council, which has a 23,000-strong workforce.

The generosity of the packages being given to the senior managers, who include accountants and lawyers, was attacked by the SNP, who criticised the pay-offs at a time when the council is threatening to raise the council tax.

Gordon Matheson, Glasgow's Labour leader, has called for local authorities to be given the option of raising the council tax to reduce the need for cuts in services as budget cuts bite.

James Dornan, the SNP leader on the council, said money would be better spent protecting public services than giving big pay-offs to bosses. "Paying out this kind of money whilst threatening to push up pensioners' council tax and cut services is obscene," he said. "128,000 on average for senior executives - all of whom are nearing retirement - is an incredible pay-out that taxpayers will seriously struggle to understand.

"So far Glasgow's Labour leader has called for a council tax rise, a possible end to free personal care, increased fees for school breakfasts and scrapped free fruit schemes for the city's children - 127m could make a lot of difference to these programmes, easing the way into what will be a tight budget settlement for the next three years.

"This level of pay-out changes the whole picture and brings the benefits of this Labour plan into question."

But the council argued action taken now would save money in the long run.

A spokesman said the local authority had to save 180m over the next three years. Laying off staff would save a 45m-per- year salary bill.

About 80 per cent of each package will go towards reimbursing managers' pension funds for the costs of early retirement, with the remainder being spent on giving them the equivalent of 30 weeks' salary. The deal does not apply to the local authority's 5,000 teachers.

Paul Rooney, Glasgow City Council's executive member for personnel and governance said: "The Scottish Government's budget will lead to unprecedented and brutal cuts right across the public sector but particularly in local government. We simply cannot sustain the number of staff we have.

"Recruitment freezes and trawls for targeted redundancies simply won't cut it. All staff over the age of 50 have been treated equally and if we weren't able to offer early retirement, then we would be looking at compulsory redundancies or even bigger cuts elsewhere.

"The SNP have now had two opportunities to vote against this policy and both times they nodded it through. Which would they prefer: compulsory redundancies or bigger cuts?"

The row erupted as it emerged that Keith Jackson, the former boss of Edinburgh Leisure - the non-for-profit body established by Edinburgh council to run its sports services - received a 180,000 golden goodbye to take early retirement earlier this year.

Tory finance spokesman Derek Brownlee, MSP, said: "Every council will have to reduce staff numbers, and voluntary redundancy is preferable to compulsory redundancy. However, Labour-run Glasgow City Council has questions to answer about the generosity of these pay-offs.

"Voluntary groups in Glasgow have had funding cut, and council taxpayers face a rise in bills next year.

"It seems the only group Labour will look out for is highly paid public sector managers."

How it works

The voluntary redundancy package will see 103 senior managers benefit from a 13 million fund.

The managers, who are all paid a minimum of 45,000 per year and are over 50 years old, will be given 30 weeks' pay.

In addition, their pension funds will be reimbursed to meet the cost of early retirement.

The pay-out comes after the Labour leader of Glasgow City Council, Gordon Matheson, called for local authorities to be given the option of raising the council tax.

He said: "Over the next three years, Glasgow is looking at having to save an estimated 180m from our budget."