Oldham Council has worked up plans to use £18million to pay off staff being made redundant following the budget crisis Labour revealed.
The Council has made a cap in hand appeal to the government for a Capitalisation Order to allow them to spread the cost of redundancy over three years. If accepted the council will need to allocate £6million each year for three years just to meet the repayments.
Labour Leader Councillor Jim McMahon said “Oldham Councils is in a financial crisis. It has mounting debts and a damaging government budget settlement which is hitting front line services and the most vulnerable hard. The cost of redundancy is huge and a false economy. We are still paying today for those members of staff made redundant years ago and unless we break the cycle we will never step back from the brink.”
Labour went on to highlight the cost of enhanced redundancy payments adding “we will pay £6million over and above the legal minimum to try and sweeten the pill, but surely the council should be focused on getting a grip of the budget crisis rather than continuing the cycle of debt and redundancies.”
To add further to the uncertainty, doubt has been cast on whether coalition government will sign off the repayment plan, meaning the council may have to find all, or part of the £18million in one go.