Sandwell Council spent £38m on redundancy payments in last decade

Monday, 29 January 2024 16:22

By Christian Barnett, Local Democracy Reporter

Credit: Google

More than £38 million has been handed out in redundancy payments by Sandwell Council in the last decade.

Government figures show a total of £38,666,217 has been spent on 1,245 ‘exit packages’ by Sandwell Council since 2014/15. This includes £23,334,432 in pension contributions and £2,326,350 in ‘goodwill’ payments to those made redundant. 

Comparing these figures locally, City of Wolverhampton Council paid out £40.7m during the same period but on nearly double the amount of redundancies – with Wolverhampton’s 2,388 ‘exit packages’ compared to Sandwell’s 1,245.

Dudley Council spent £28.3m on 1,458 exit packages since 2014/5 and Walsall Council spent £22.8m on 1,222 redundancies, although the authority did not submit figures to the Department for Levelling Up, Housing and Communities in two of the financial years. A spokesperson for Sandwell Council said:

“Over the last decade we have seen increased demand for our services at the same time as our costs have gone up and our core funding from the government has gone down. We have to ensure our workforce is efficient, able to deliver services to Sandwell residents and to adapt to the changing demands we face.

"The staff costs should also provide value for money for council taxpayers. Since 2014 our total staff headcount has reduced by more than 1,000 and, where appropriate, one-off payments have been made to staff leaving in line with our HR procedures.

“We have much to be proud of in Sandwell, such as our fantastic parks, work to support and protect vulnerable children and the best new community leisure facility in the country, the Sandwell Aquatics Centre.

“But like all local authorities, we continue to face significant financial challenges with a budget pressure of £49m in the next financial year.

“We are hugely ambitious for Sandwell and will continue to make decisions to manage our finances responsibly so we can provide the best possible services for our residents.”

While the £1.9m spent that year was the lowest across the last decade, the 43 redundancy payments made averaged £44,550 each – the highest in the last ten years.

The most paid out in a single year was more than £9 million on 375 redundancy payments in 2014/15 with the lowest £1.9m paid out in 2021/22. 

“A senior management review which was approved in October 2020 reduced the number of director posts and delivered savings for the council,” a spokesperson for Sandwell Council continued. “As part of this, additional one-off costs were met in line with the council’s HR policies.”

In 2022/23, the latest year available, Sandwell Council spent £4.4m on 135 redundancy payments – giving an average cost of £32,600 to the taxpayer per ‘exit package.’

Figures also show that more than £2.5m was paid out in 2019/20 and £4.9m in 2018/19.

Payments totalling £3.5m and another £4.9m were handed out in 2017/18 and 2016/17 respectively – preceding the £3.2m and £4.2m made in exit payments in 2015/16 and 2014/15.

The average cost of each exit payment in each year rarely fell below £35,000 and increased significantly after £23,600 and £24,200 averages posted in 2014/15 and 2015/16. The average cost in 2016/17 was £41,400 before falling to around £35,000 in the following year and £38,000 twice in the two years after that.

The average cost was £32,300 in 2020/21 before rising to the highest average in the figures at £44,550 in 2021/22.


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