News / Council exit cash bonanza
SHETLAND Islands Council paid out £3.6 million in redundancy packages last year as it shed 65 staff as part of its savings drive.
The figure compares well to the £3 million paid out the previous year to just 36 people who left their posts early. However in Orkney last year the council managed to get rid of 34 employees for just £460,000.
The exit payment figures have been published for the first time under new regulations in the council’s draft accounts for 2011/12, which also reveal the salaries of the authority’s most senior staff.
The accounts show that in 2010/11 one SIC employee was paid a huge £383,000 to leave the council, one received £349,000 and three people received packages worth more than £200,000.
Last year the largest redundancy payment was less than £200,000, while a total of 230 staff lost their jobs. The total cost of the exit packages must be made up in savings over the next three years and ultimately lead to a reduced wages bill.
The only staff to have their remuneration packages published were former infrastructure director Gordon Greenhill, who received almost £53,000 in compensation, and chief social worker Ann Williamson, who received more than £53,000 due to her length of service.
As to wages, interim chief executive Alistair Buchan earned almost £156,000 last year, almost one sixth of which covers the cost of his accommodation, car and travel to his native Orkney from where he has been seconded for 26 months.
The next highest earner was former education and social services director Hazel Sutherland who earned £96,000 standing in as head of finance after the early retirement of Graham Johnston.
Sutherland received a long service award, as did the council’s chief lawyer Jan Riise, whose total pay last year was almost £79,000.
The accounts highlight the critical state of the SIC’s finances as it strains to rein in spending by £30 million over the next two years.
There are 52 reviews currently being carried out into how those savings will be made, which are due to report by the beginning of next year.
Pressures on the council’s finances include a shrinking government grant (down to £90 million by 2014/15); the threat of the £800,000 housing support grant being lost (to be made up by higher council house rents and lower maintenance); and a decline in returns on investments as the reserve fund shrinks from £222 million to £193 million.
Returns on investments were down to 3.2 per cent last year from the average of 5.75 per cent over the past 20 years.
There was the one off cost of £4.8 million paid to Lerwick Port Authority for the dispute around the Bressay bridge and harbour dredging.
Meanwhile income from Sullom Voe is being hit by the two to three year closure of the Schiehallion field.
Rising fuel costs, expected pay awards and welfare reform are all expected to add to the pressure on the authority’s finances over the next few years.
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