Agenda item

Voluntary Redundancy Scheme update

This report provides an update to the committee in respect of the council’s 2020 Voluntary Redundancy Scheme. It also outlines the impact on the scheme of a current consultation concerning changes to the Local Government Pension Scheme and some changes already in force in new Regulations concerning public sector exit payments.

Minutes:

Debra Norman, Director of Legal, Audit and HR Services, introduced the report providing an update in respect of the Council’s 2020 Voluntary Redundancy Scheme. The report also outlined the impact on the scheme of a current consultation concerning changes to the Local Government Pension Scheme (LGPS) and some changes already in force, in new Regulations concerning Public Sector exit payments.

 

In considering the report, Debra Norman informed members that following the Chief Executive having authorised the opening of a further Voluntary Redundancy Scheme in September 2020, 123 members of staff had submitted applications.  As a result of the applications having been assessed (on the basis of the process outlined within section 4.2 of the report) 75 had been agreed. Members were advised that in addition, a further 12 had been considered appropriate for approval, but the cost of severance for these individuals was in excess of £95,000 taking account of pension strain costs should an unreduced pension be paid.  Members’ attention was drawn to the legal uncertainties surrounding these specific severance payments, which had been set out within sections 4.7 to 4.14 of the report, as a result of recent Government guidance and consultation.  Given the uncertainty, the Committee noted that the LGPS Advisory Board had suggested that administering authorities take steps to mitigate their risk in respect of redundancies where the cost of severance was in excess of £95,000 suggesting that an actuarially reduced or deferred pension without the cash payment referred to by the Government guidance was offered.  Whilst recognising the unsatisfactory nature of this position for both the Council and affected staff, this was currently being proposed as the recommended approach.  In addition, it was also recommended that the Pension Fund adopt the new draft Government Actuary’s Department (GAD) strain factors in advance of the LGPS Regulations being updated, as expected by the time the staff taking voluntary redundancy under the scheme came to leave the council.

 

Members were advised that as a result of the current position 3 of the 12 staff affected had subsequently withdrawn their request for voluntary redundancy with members noting the impact in terms of both the organisation and staff morale.  The position and approach being adopted had also been subject to discussion with Trade Union representatives (as detailed in section 4.22 of the report).  Whilst clear about their opposition to the Government’s legislation in respect of Exit Payments and the detrimental impact on staff moving forward, they had been appreciative of the Council’s transparency in respect of the proposals outlined and felt the approach being adopted was reasonable in view of the current difficult position faced by the Council.  A request had been made for the Council to consider seeking waivers for those staff impacted by the Exit Cap, although members noted that these were unlikely to receive consent given the criteria established by Government was very restrictive.

 

Following on from the discussion and advice provided during the meeting it was RESOLVED:

 

(1)      To note the proposed approach to redundancies where the cost of severance for an individual was in excess of £95,000 taking into account pension strain costs if an unreduced pension was paid pending clarity as to legal entitlements in those circumstances. 

 

(2)      To note that none of the payments in respect of individuals pursuant to the Voluntary Redundancy Scheme included any element in addition to sums calculated in accordance with the Council’s Managing Change Policy and the strain payments that would arise under the Local Government Pension Scheme if unreduced pensions were paid.

 

(3)      To note the overall outcome of the Voluntary Redundancy Scheme run during September 2020.

 

(4)      To agree, as the administering authority of the Brent Pension Fund, to adopt the early retirement strain factors from the Government Actuary’s Department (GAD) as outlined in sections 5.17 – 5.21 of the report.

 

 

Supporting documents: