THE true cost of austerity in Edinburgh has been laid bare as new figures reveal £15 million of golden handshakes have been paid to council staff shed during cost cutting.
A report into city finances shows 397 employees lost their jobs – costing £14,976000 in payoffs over the last two years.
One unnamed official received a redundancy package of up to £250,000 but the bulk of pay awards cost less than £40,000. Tax watchdogs said many public servant pay-outs were the envy of the private sector and the council should “constrain their generosity” while others claimed the £40,000 average was fair.
Among the reasons why the city has been forced to cut its cloth is a reduction in the cash pot it receives from the Scottish Government – leaving a budget shortfall for 2013-14 of £10.8 million, rising to £95 million by 2017-18.
Speaking about the payouts, a spokesman for Taxpayers Alliance said: “Lay-offs through the economic downturn are sadly inevitable, but people across the private sector are aghast at the size of some of the golden handshakes given out to public servants.
“It’s all too easy to use taxpayers’ money to be generous to your peers and fellow workers, but all public sector managers need to remember that these payments are coming straight out of the pockets of hard-working families.
“They need to constrain their generosity where at all possible, especially where those laid off come straight back into another job in another authority within weeks.”
Independent MSP Margo McDonald said the size of the total redundancy bill initially makes “your eyes pop” but said the average pay-out of £40,000 was “not excessive” as some employees may have worked at the council all their lives.
She said: “The council has had to run on empty in recent years. In times of this austerity – or some might call it poverty – councils have been expected to continue to run services which prop up people who have fallen through the employment net, often through no fault of their own.
“Services have had to do more.
“What has happened at the council is the result of the failure of central government to manage the economy and stave off the worst effects of global and turmoil in the international economy.”
It is thought the job loss over the last two years represents just 2 per cent of the council’s current workforce.
Councillor Alasdair Rankin, the city’s finance and budget convener, said: “Exit packages detailed in the unaudited financial statements include the council’s obligatory payment to each individuals’ pension fund and is not necessarily what the employee received directly.
“In these financially difficult times the council has to continually review its priorities so that we can balance our budget.
“Voluntary early release is an important part of achieving this.
“Underpinning this there has to be a strong business case that saves the taxpayer money in the long run by meeting a costs savings test and which still allows us to re-align and maintain high quality services for the people of Edinburgh.”