fifty teachers are among the 180 Scottish Borders Council employees whose applications for either early retirement or voluntary severance, totalling £4.56 million, are due to be approved by councillors today, Thursday, February 24.
Initially 600 members of staff had responded to a request by the council for expressions of interest in voluntary early retirement or voluntary severance, and following evaluations of length of service, skills and financial payback, 180 remained plus a small number of other applicants that are still to be considered.
The £4.56 million one-off cost to the council in early pension payments and severance agreements will be offset against an annual saving of £4.89 million of savings each year on their salaries.
However, many of the teachers who are set to leave Borders schools will need to be replaced “with those newly qualified placed on a significantly lower point on the scale”, at a cost of around £1.41, producing an overall teaching staff saving of £3.43 million a year.
Education (75), social work (38) and technical services (41) are the departments losing most staff and while March 31, this year, is the most likely severance date for most, there may be some members of staff who will have to wait up to 15 months before leaving the council.
The report by Paul McMenamin, SBC’s director of resources, said: “Of the 180 applications being currently considered, 17 related to the ICS structural reduction already included within the manpower budget (including nine teacher posts). This amounts to an estimated net saving of £472,000.
“A further 73 applications amounting to £1.44 million are required in order to deliver savings already approved within the 2011/12 financial plan.
“The remaining 90 applications should deliver a further £1.51 million of savings to the council.
“These have not been committed within next year’s financial plan and therefore will provide an additional resource to the council as it enters a further period of financial pressure.
“It should be noted, however, that a significant proportion of this remaining resource will still be required to fund the planned structural reviews ongoing within services, and in particualr, the chief executive and resources department and cannot be treated as a cash saving arising from the voluntary severance/early retirement in full.”
Having secured sufficient volunteers to leave the council, councillors now need to decide how to finance the severance payments.
One option before them is to fund them within the coming financial year from reservers; alternatives are to fund the costs from the revenue budget, secure borrowing consent from the Scottish Government to be repaid over five or ten years, or spreading the up-front cost on the Local Government Pension Scheme fund over a period of up to five years.
SBC has set aside £500,000 in the 2011/12 budget to meet the costs of a reduction in staffing, plus there is a further £1 million set aside from other services.
This still leaves £1.28 million to find in order to finance the staff reductions and consent is currently being sought from the Scottish Government to allow them to borrow the remaininng £1.28 million, council officials anticipating approval being given by councillors when they meet today.