Voluntary and compulsory redundancies on the cards as council faces £23m deficit

Anthony Lewis Local Democracy Reporter

A council leader has explained the need to consult on 100 voluntary or compulsory redundancies in the face of a £23m budget deficit.

Merthyr Tydfil Councillor, Geraint Thomas has set out why the council is going to consider issuing a section 188 letter to unions to start a 45-day consultation exercise to identify how to make savings, with redundancies being an option.

If approved by councillors on Wednesday, January 17, the council would also notify the secretary of state for business, energy, and industrial strategy of the potential for 100 voluntary or compulsory redundancies. The council said it would “require the facility” to make some of the necessary budget savings through redundancy.

Deficit

Following the recent announcement of the provisional Welsh Local Government settlement on December 20, Merthyr Tydfil is set to receive a funding increase of 3.4% for the 2024/25 financial year.

Despite this, the council’s medium-term financial plan (MTFP) for 2023/24 to 2026/27, approved by the council on March 8, indicated a budget deficit of £10.5 million for 2024/25, escalating to an overall deficit of £23.3 million over the period of the plan.

Taking into account additional funding from the settlement and increased costs due to the pay award, high inflation, and unavoidable additional demands, the revised budget deficit for 2024/25 now stands at around £13 million.

Cllr Thomas said: “In response to this challenging financial climate, we are actively exploring budget reduction opportunities. Unfortunately, this process necessitates making tough decisions about the services we can sustain and those we may need to discontinue.

“These decisions may lead to job losses, and we must be prepared for this unfortunate outcome.  Tomorrow night, 17 January, a report will be presented to full council regarding the issuance of a Section 188 letter to relevant trades unions. A section 188 notice is a legal requirement summarizing potential redundancies resulting from budget savings.

“Our staff are our most valuable asset and we will seek volunteers for redundancy in an effort to keep the number of compulsory redundancies to a minimum or avoid the need for them altogether.

“Collaboration with the relevant trades unions is crucial for credible and achievable savings.

“This is an extremely difficult time for all local authorities across Wales and the scale of the challenge is significant.  I want to take this opportunity to thank our officers who are working tirelessly to identify savings.”

“Fairness”

All employees whose contracts are under NJC ‘green book’ terms and conditions are included in the consultation exercise plus those on JNC chief officer conditions and the chief executive are affected.

‘Green book’ employees working within schools form part of this consultation exercise but teachers are excluded from the grounds contained within this section 188.

The report said that the council intended to work with schools in realising the changes for school-based staff in the interest of equality and fairness to all employees.

The council report said that the intention of the council’s union consultation was for representatives to work with the trades union in reviewing all non-employee savings and proposals that affected employees and where there was an identified need to make redundancies the trades unions would be fully engaged during this process.