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Redundancies at Wolverhampton City Council to cost £18m in payouts

Wolverhampton | News | Published:

Making council workers redundant will cost one cash-strapped authority £18.7 million over two years, figures have revealed, as it emerged that it will be down to its last £623,000 of reserves by the end of the next financial year.

It can also be revealed that Wolverhampton City Council is planning to offer less generous packages to staff whose jobs are axed amid £123 million worth of cuts.

The controlling Labour cabinet will tonight vote to look into reducing its redundancy to 'statutory minimum'.

A report to councillors reveals: "It should be noted that it cannot be guaranteed that the council will be able to allow employees to access a full pension between the ages of 55 and 60 after March 31 2014."

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There are 1,400 jobs set to go at the council with redundancy expected to put a burden of £7m on the council's bank balance in 2014/15.

The council is re-opening a voluntary redundancy scheme to applicants, offering a more generous package than the one given to those who are made compulsorily redundant.

The £18.7m cost of redundancy, revealed in the report to the cabinet, is based on making 1,137 redundancies over two years.

At least 1,400 posts must go over five years.

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Opposition Conservative finance spokesman Councillor Wendy Thompson said: "The council has seriously underestimated the changes to its grants."

Budget reports reveal that without deep cuts the authority will be down to its last £620,000 in it's 'uncommitted general reserves' by the end of the next financial year.

Finance bosses say they need to have a minimum of £10m available in reserves.

Councillor Andrew Johnson, who is in charge of finance, said: "The £620,000 we would have left without urgent action is about the equivalent of taking 15 children into care."

The controlling Labour cabinet will tonight vote to instruct managers to stop all but 'absolutely essential' spending for the remainder of the financial year while more cuts are drawn up.

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