Dec 2010 06

Council pensions and the staff ‘merry-go-round’8

There are many people in Britain who are facing redundancy. Many do not know if they will still be working after Christmas. This is the economic reality, and they also know the redundancy payments they will receive will be at a minimum. Companies cannot afford to pay more as they struggle to stay in business. If you work in the public sector, however, it’s completely difficult.

Hull City Council abolished the role of Head of Communications and Marketing in September last year, and the incumbent was earning a salary of £65,942. The redundancy payment they received was £109,576. As you can see, this is almost two years’ salary. The argument the council uses is it saves a £66K salary and – eventually –  Hull taxpayers will be better off. These type of high payouts go on all the time, but just over a year on, what has happened to this officer?

They did not sit back and watch their redundancy payment dwindle, struggling to find work. After one month, they were working as the interim Head of Communications and Marketing for another council! That job lasted for six months. They immediately jumped from that job to another as an interim senior manager in another council, where they are currently still employed.

I am not naming this person (although it is not difficult to find out who they are) as I do not wish to single one person out. What I am criticising is the ‘merry-go-round’ in local authorities that costs taxpayers dearly. Strings are never attached when huge amounts of our money are paid out. Former employees are free to pick-up a redundancy payment from one council and jump into another job with a neighbouring council the next day! Many of them also work as consultants and charge exorbitant fees, which nicely tops-up the already generous pension or redundancy payment they have received.

We have called for reform in public sector pensions. To give you two examples, the chief executive of Hull City Council receives a salary of £160K per annum, but when you add our contributions to her pension fund – over £40K – her total remuneration is over £200K! Our most recent Town Hall Rich List (covering 2008/09) shows 6 Hull City Council employees earning above £100k a year. In the 2009/10 accounts (including generous, taxpayer funded pension contributions) this rises to 17. This is completely unsustainable, as our report earlier this year highlighted.

We are never going to bring down government debt (a millstone hanging around the necks of future generations) unless we radically reform public sector pensions. This is urgent, and requires immediate action.

Related Posts

  • CJD

    This stuff goes on all over the public sector. NHS, local government, education. If you actually lose your ‘role’ (note not job) you find a similar role in a like organisation which generally seeks the same type of non job addicted, mediocre unable to make decisions type candidate. In fact its actually expected that this will happen so the carousel continues. Unless the systems are changed we will not reduce this deficit as the same pointless, talentless individuals will go on screwing the public purse!

  • CJD

    This stuff goes on all over the public sector. NHS, local government, education. If you actually lose your ‘role’ (note not job) you find a similar role in a like organisation which generally seeks the same type of non job addicted, mediocre unable to make decisions type candidate. In fact its actually expected that this will happen so the carousel continues. Unless the systems are changed we will not reduce this deficit as the same pointless, talentless individuals will go on screwing the public purse!

  • CJD

    This stuff goes on all over the public sector. NHS, local government, education. If you actually lose your ‘role’ (note not job) you find a similar role in a like organisation which generally seeks the same type of non job addicted, mediocre unable to make decisions type candidate. In fact its actually expected that this will happen so the carousel continues. Unless the systems are changed we will not reduce this deficit as the same pointless, talentless individuals will go on screwing the public purse!

  • CJD

    This stuff goes on all over the public sector. NHS, local government, education. If you actually lose your ‘role’ (note not job) you find a similar role in a like organisation which generally seeks the same type of non job addicted, mediocre unable to make decisions type candidate. In fact its actually expected that this will happen so the carousel continues. Unless the systems are changed we will not reduce this deficit as the same pointless, talentless individuals will go on screwing the public purse!

  • T Griffin2

    I dispute that the Local Authority gravy train is talentless. To wriggle ones way up through a labyrinth of non jobs requires enormous talent. Unfortunately this is entirely at the expense of ordinary working people and the net gain to society is several times less than nothing.

  • Francis Kelly

    I had no idea this kind of behavious was permitted! In the “normal” world (i.e. not public service) if a firm makes you redundant – and you receive redundancy pay – then you may NOT return to that employer as an employee for a considerable time (1 ful tax year??) without you and the employer attracting significant taxation penalties.
    My argument is this – if you return to public service – even if it is with another council as in the example given – then you are STILL in public employment, in receipt of the same public funds – and thus liable to penalty.

  • Ron Havenhand

    The list of examples of abuse of power and wasre of public money are endlessly fascinating. I would be even more fascinated if someone could demonstrate a glimmer of hope that anything will ever be done by anyone to put a stop to it. Grumbling about it is good fun but what does it achieve?

  • Peter Dutton

    This is iniquitous. If somebody is in public employment is made redundant or leaves work through illness and they should be given a reasonable redundancy payment and their pension if appropriate. However, if they then get another job in the public sector, the redundancy payment should be recouped from the date of their new employment and payment of their pension frozen until they actually retire. In the meantime they can still contribute to their final pension.

    Peter Dutton