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Southampton: New figures reveal council job cuts cost £616k

The Local Government Association said councils had seen their workforce shrink, despite rising demand for services, and demanded more help for authorities facing “severe budget pressures”.

It comes as the city council seeks to shed more staff to save £35m by the next financial year. 

New data from the Department for Levelling Up and Communities shows the authority council spent £616,000 on making 29 workers redundant in the year to March 2023. Each package had an average cost of £21,000.

The council made a total of 33 redundancies the year before, at a total cost of £997,000.

READ MORE: Hundreds of Southampton council workers are being asked to apply for voluntary redundancy

Nationally, over £185m was spent on staff redundancies by councils across England, the lowest annual amount in nine years. Last year just over £214m was paid out to departing employees.

The number of staff taking redundancy also hit the lowest point since 2014, with over 7,800 exit packages agreed, at an average cost of £23,000. This was a slight increase on last year, when the figure was £22,000.

Cllr Pete Marland is chairman of LGA’s resources board.

He said: “Despite increasing demand for services, local authorities also face challenges in getting the right people into the right roles, such as in children’s services, adult social care and planning.

“Our own workforce survey shows 94 per cent said they were experiencing recruitment and retention difficulties.

“Only long-term, consistent funding from central government will be enough to meet inflationary pressures and the rising costs of the National Living Wage, on top of increasing energy and other costs, if we are to avoid more redundancies and prevent exacerbating an already acute capacity crisis in some areas.”

Nationally 325 senior employees were made redundant last year, an increase of 70 on the year ending 2022.

Together they received a total of £28m, at an average of £85,000 each.

READ MORE: ‘Significant’ number of Southampton City Council staff seek redundancy

Ian Miller, honorary secretary of the Association of Local Authority Chief Executives, said payouts to senior council staff were significantly lower than those to top civil servants.

“Council funding has not kept pace with inflation and demand for services. The figures demonstrate how senior staff continue to lose their jobs because of the need to find savings”, he said.

“The cost of the average exit package for senior staff has fallen significantly in absolute and real terms since 2015.”

“The £85,000 cost of the average exit package for senior staff in local government pales into insignificance compared to the £335,000 paid to Sir Tom Scholar when he was sacked as Permanent Secretary of HM Treasury and the £122,000 he received as “annual leave adjustments and compensation in lieu of notice”.

“Perhaps the government needs to look closer to home in monitoring exit payments.”

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