Exit package for council employee exceeds quarter of a million pounds

Richard Youle Local Democracy Reporter

A council employee’s exit package exceeded a quarter of a million pounds, according to draft accounts for 2023-24.

The £255,000 figure was one of 39 exit packages for Swansea council staff who took early retirement or voluntary redundancy. There were also 17 exit packages for those who were made redundant. Council staff include teachers.

The authority is not commenting on which post the £255,000 related to but it said the position no longer existed. It added that the sum was not a one-off payment made to the individual or a “golden goodbye” but a package based on his or her years of service and pension contributions.

Public and private sector organisations offer staff early retirement and voluntary redundancy from time to time to reduce their pay bill and minimise compulsory redundancies. There is an upfront cost but the money is recouped, assuming the post isn’t filled again.

“Cost effective”

A council spokesman said: “This approach to redundancy and early retirement is a cost-effective way to cut costs, make savings quickly and avoid compulsory redundancy as much as we can.

“This is because, on average, it takes only a year to recoup the amounts paid out to those leaving through early retirement-voluntary redundancy, while the savings from deleted posts continue in future years and can amount to millions of pounds.”

The 56 exit packages in 2023-24 cost a total of £1.62 million – a tiny fraction of the council’s £433.9 million wage bill. But the three highest packages – £255,000, £184,000 and £133,000 – accounted for more than a third of it. The £1.62 million exit package cost was slightly lower than the previous year’s.

The council has just over 11,000 staff and 267 of them earned more than £60,000 in 2023-24, according to the draft council accounts, compared to 186 in 2022-23. Again these could include teaching staff. The highest paid officer, chief executive Martin Nicholls, earned £162,379 excluding employer pension contributions. The median – or midpoint – remuneration for employees was £29,698.

Other figures in the accounts included £5.87 million of council car park income which, set against expenditure of £2.3 million, returned a healthy £3.5 million surplus. The surplus is reinvested in transport services.

Accounts

In 2023-24 the council spent £1.03 billion on wages and day-to-day services, such as education and social services. Nearly half of the £1.03 billion came from fees, rent, charges and grants. Another big chunk came via the Welsh Government’s revenue support grant and a share of business rates. The remainder – £151.5 million – came from council tax.

The 200-page draft accounts were discussed by the council’s governance and audit committee on September 4. The main focus was on the financial outlook facing local authorities, uncertainty around pay rises and difficulties trying to plan ahead. Exit packages weren’t discussed.

Finance director Ben Smith told committee members that 2023-24 had turned out to be a “remarkably stable year”.

But he said the “mood music” from Welsh Government officials suggested to him that there wouldn’t be large amounts of cash heading councils’ way in 2025-26.

The new Labour UK Government will publish its first budget on October 30. The Welsh Government will set out its various spending proposals later this year, and councils will set their budgets for 2025-26 in February or March.