Agenda item

The Committee considered a report from the Chief Executive detailing statutory and contractual entitlements the Council would be required to pay as a result of potential redundancy associated with the termination of posts arising from the proposed Senior Management Review (SMR). The SMR proposals were considered by the Strategy and Resources Scrutiny Committee 30 January 2023 and recommended for approval by the Leader of the Council at agenda item 6 Council (to be considered on 2 March 2023).

As there will be fewer posts in the new senior management structure, redundancies are expected. Individuals impacted by the review will be offered support to seek redeployment in accordance with the Council’s Organisational Change policy and will be offered outplacement support.

The Committee noted that the Chief Executive’s report had been updated and sent to every Member of the Council.

The Committee’s terms of reference and the Council’s Pay Policy statement require Council considers (and approves) individual statutory exit costs in excess of £100,000. Regardless of the amount the Council has an obligation to fulfil statutory and contractual redundancy and pension entitlements when a member of staff is made redundant.

The Committee noted that the 2022/23 budget includes a provision to fund statutory and contractual entitlements as a result of redundancy arising from the SMR.

The Committee noted information describing potential termination costs for each post at risk due to the SMR.

A conservative estimate of total costs was provided but the actual amount will not be known until the SMR selection process has concluded.

Some of the posts which are proposed to be deleted are held by persons who are over 55 years of age, and as a result there is the potential for termination costs to exceed £100k. Termination costs are made up of redundancy, which is paid to the individual and  capitalised pension paid to the Local Government Pension Scheme, which can make up around 75 per cent of costs the Council is liable to pay.

Statutory entitlement to a redundancy payment is based on length of service and age, subject to a maximum. Capitalised pension costs or ‘pension strain’ is based on contributions to the Local Government Pension Scheme (and age before normal retirement). No non-contractual or ex-gratia payments will be paid.

Individual statutory entitlements for posts at risk of contractual severance above £100k which require the approval of Council are:

Director of Communities and Neighbourhoods, Assistant Chief Executive, Head of Community Services, Head of Housing Maintenance and Assets, Head of Housing Services, Head of Human Resources and Head of Property Services.

Following the implementation of the SMR when redundancy obligations will crystalize the Chief Executive will report total statutory severance costs to the Committee. These costs will also be noted in the Council’s Statement of Accounts.

Council is recommended (unanimous):

To approve individual statutory and contractual termination costs over £100k (the posts described above) arising from the SMR due to contractual severance.

To delegate authority to the Chief Executive to implement termination of employment by reason of redundancy, arising from the SMR, where individual statutory and contractual costs are greater than £100k.