A report by the Chief Executive informed the Committee that the Council was facing a considerable financial challenge to reduce its net budget. The current position was that the Council was facing a budget deficit of approximately £109m over the next three years.  The projected deficit for 2013/14 was currently £39m, with exception items at £38.4m, giving a total of £77.4m for 2013/14.  Consequently, this would necessitate significant changes to the manner in which the Council conducted its business and this would impact on the Council’s workforce. 

The Council currently employed its workforce on national and local conditions of service. The local conditions of service were subject to local agreement through a collective agreement with recognised Trade Unions (NJC Recognition Agreement with Trade Unions). The Council had a legal obligation to consult with recognised Trade Unions and staff on options to reduce the cost of the workforce and so reduce the potential numbers of job losses.  The requirements for consultation were laid out in the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).  

The Cabinet was told that as part of the consultation, the Council was required to consult on the terms of the Enhanced Discretionary Severance Scheme.  Consultation in relation to the proposal to change the Council’s Enhanced Discretionary Severance Schemehad begun on 12 November 2012.  During this period of consultation, the Council had met with the recognised Trade Unions through a series of regular meetings, with the aim of seeking agreement and considering the Trade Unions feedback in relation to the Council’s budget shortfall for 2013/14. 

Members noted that all employees affected by the proposal to change the Council’s Enhanced Discretionary Severance Scheme had received a letter on 23 November 2012.  The letter had informed that the Council had opened consultation with the Trade Unions in relation to changing the current Scheme to a Scheme that was more affordable for the Council.

The Chief Executive introduced his report and informed that the Council had a duty to keep its Scheme under regular review and ensure that it was both practical and affordable.  He advised that the application of the 2.2 multiplier was not practical or feasible.  The Council would have to make deeper cuts to finance the current Scheme, placing further pressure on the Council’s budget.

Appended to the report were a range of options, with costs, for the Council’s Enhanced Discretionary Severance Scheme – based on 15% of the workforce for Members’ information.

The Chief Executive reported that there had been a number of discussions with the Trade Unions and with the Department for Communities Local Government (DCLG) with regard to the Council being allowed to capitalise the statutory element of any redundancy costs that became payable.  The DCLG was considering this matter but had given a positive indication that it may allow the Council to capitalise up to £5m.  The Chief Executive however, emphasised that a firm decision had not yet been made but was optimistic of a positive outcome.

It was,  ...  view the full minutes text for item 183