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Revealed: the 'staggering' £4bn cost of a decade of job losses

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Councils have collectively spent almost £4bn making 223,000 staff redundant since 2010, LGC research reveals.

The north-west has seen the greatest number of people lose their jobs (41,190) at a cost of more than £703m over the past eight years.

However, Birmingham City Council is the authority that has made the most people redundant (8,769) and spent the most on associated exit packages (£184.8m). 

That is more than double the number Manchester City Council has made redundant (3,952) – the second highest – and just over twice the amount Staffordshire CC spent on redundancies (£91.4m), the second biggest outlay.

The total number of exit packages councils are negotiating with workers has dropped for the fourth consecutive year – down from 27,352 in 2013-14 to 17,969 in 2017-18. Consequently the amount spent on redundancies has also dropped from £464.2m to £325.3m over the same timescale. 

The nadir occurred in 2011-12 when 42,834 people were made redundant and total costs hit a high of £693.5m.

Karen Grave, president of the Public Services People Managers Association, said: “The data that has been gathered on the number of jobs lost to local government since 2010 is staggering and it reflects the significant concern being expressed by local government and other leaders as to the pressure the sector is under.”

LGC’s research on redundancies and exit packages used data contained in councils’ statements of accounts from 2010-11 to 2017-18 for all 152 of England’s top-tier councils. The numbers relate to both compulsory and voluntary redundancies.

In total, more than £3.9bn has been spent on more than 222,800 redundancies since 2010.

The north-west’s total number of job losses and associated costs for exit packages accounted for 18% for each respective total – by far the biggest proportion out of all of the regions.

Councils in the East Midlands, meanwhile, have had the fewest number of redundancies (11,871) and spent the least on associated costs (£196m) – equivalent to 5% of the total figures - in the last eight years. 

Responding to the research, a Birmingham City Council spokesperson said: “These figures need to be viewed in the context of the council’s status as the largest in the country and its size back in 2010. We had approximately twice as many employees as we do now and this change is largely as a result of the need to respond to significant reductions in central government grant and the reshaping and prioritisation of services to fit the financial resource available to the council.”

Carl Ollerhead (Lab), Manchester’s executive member for finance and human resources, said the city has been “among the hardest hit” by austerity, with budgets reduced by £271m since 2010. The council has had to take “some very difficult decisions” and reduced its workforce by almost 40%, he said and added that had been “achieved entirely” through voluntary losses.

“Although this has involved a significant one-off cost, met through reserves, it is delivering ongoing savings,” said Cllr Ollerhead.

The 10 councils which have spent the most on redundancies 2010-11 to 2017-18
10 councils which spent the most on redundanciesTotal cost (£m) 2010-11 to 2017-18
Birmingham £184.8
Staffordshire £91.4
Lancashire £89.3
Manchester £75.4
Liverpool £71.3
Gateshead £66.3
Sheffield £66.2
Nottinghamshire £63.5
Newcastle £61.8
Bristol £56.3

Staffordshire’s leader Philip Atkins (Con) said redundancies at more than 420 schools accounted for about 40% of the total losses. He said “schools make their own decisions on redundancies” depending on changing pupil numbers.

As the county council had “changed extensively” since 2010 it is “essential” staffing levels are regularly reviewed, Cllr Atkins said. He said if redundancies are made the council had a “legal requirement to pay the right amount of redundancy payment based on pay scale and length of service.” 

LGC’s research comes as Somerset CC has announced it will axe 130 jobs as it attempts to bring its budget under control. Meanwhile Oxfordshire CC has warned nearly 900 jobs will be at risk over the next three years as it seeks to save £33m.

Matthew Egan, national officer at Unison, said: “Every council across the country is under the cosh… We have just got to the stage where every council, whatever their political persuasion or geographical location, is now getting pushed to the limit which is why we’re campaigning for more money to be given to councils in the budget at the end of the year.”

Mr Egan hoped the fact some Conservative-led councils are now “generating a bit more attention… might focus more of the attention on the plight of local councils across the country and lead to some meaningful investment back into services.”

Referring to the fact that the number of redundancies each year has been declining since 2013-14, Mr Egan, who himself was made redundant from Salford City Council in 2012, said councils had been “cut to the bone” and going further would “compromise their ability to fulfil even the most basic functions.”

Mr Egan said LGC’s research “chimes” with Unison’s survey of 21,000 council workers in the summer. Of the union’s respondents, 83% said budget cuts had impacted on their ability to do the job while 60% are regularly working beyond contracted hours. As a result, half (49%) are thinking about leaving their job for a less stressful role.

 

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Readers' comments (2)

  • It would be interesting to know what these Councils are now spending on externalising legal work to the private sector?

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  • I can say with a fair amount of certainty that one of those councils in the top-ten list are using consultants to write their business cases that were made redundant from said council not three years ago...

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