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There's a far bigger cost to redundancies than £4bn

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LGC’s essential daily briefing.

Those working in and around the sector have become accustomed to big numbers: a 50% reduction in government funding since 2010 and a funding gap of almost £8bn by 2025 to name just two.

It is with these in mind that the latest big numbers are born: more than 220,000 council staff have been made redundant since 2010 at a cost of almost £4bn.

The cost is an eye-watering amount, especially during a time when councils are metaphorically searching down the back of the sofa for loose change to help fund vital services.

But far from this money fuelling bumper payoffs for “town hall fat cats”, the vast majority will have gone to thousands of the lowest paid staff members whose jobs and livelihoods will have been destroyed by the impact of austerity. The payouts and compensation will have been what workers were legally entitled to.

The numbers, though, are so big that it can be hard to comprehend the effect these redundancies have had on every household, every family and every community.

Councils in the north of England have often claimed to have been worst hit by austerity, and LGC’s latest research backs up their complaints. While the north-west specifically has witnessed the most redundancies in total, a rough calculation shows there were eight redundancies per 1,000 head of population across the north-east, six in both the north-west and West Midlands. There were four redundancies per 1,000 people in both Yorkshire & Humber and London, three in the south-east, south-west and East of England, and two in the East Midlands.

Most employers take no pleasure in having to make people redundant, and councils are no different, especially when they are acutely aware of the extra strain it will put on the workers who remain.

Writing for LGC this week, Nikki Gibbons, director of transformation, organisational development and HR at Bracknell Forest Council, warns against ignoring “survivor syndrome” and urges councils to invest in developing the staff still in situ. If they do not, the extra pressures placed on staff can result in people deciding to leave of their own accord and find a less demanding job. It can also make it a lot harder to attract new talent.

And yet there is potentially another, more immediate, cause for concern. With local authorities becoming increasingly reliant on business rates to help fund the services they provide, making thousands of staff redundant every year is hardly going to provide households with the spending power required to boost local economies, no matter how big the total size of exit packages. £4bn might sound like a lot but, in reality, there is a far bigger cost. 

By David Paine, acting news editor

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