Staff salary sacrifice helps Council to bridge the funding gap

Shropshire Council has today (Thursday 23 June 2011), approved changes to staff terms and conditions of employment, as part of its plan to meet the major funding cuts placed on all local authorities. 

Although a wide range of cost reduction measures are involved, the main savings come from changes to sick pay and from a 5.4% pay cut for all staff.

Kim Ryley, the Council’s Chief Executive, said:

“The changes to the terms and conditions of our staff will save £7million, and this is a crucial contribution to the £76 million saving we must make over the next three years.  We simply do not have the money to carry on paying the number of staff we have now at the current rates.

“As a result of today’s decision, we have put in place a timetable for implementing the changes, including a 90-day notice period for our staff.  This will mean that the new terms and conditions will be in place in October, though the reduction in pay for all council staff will be phased over two years, to give then time to adjust to lower earnings. 

“We have been consulting with our staff and the Trade Unions for several months on this, in an effort to reach an agreement that would be acceptable to everyone.  The trade unions, and many of our staff, took advantage of the opportunity to respond to our proposals, and we were able to make important changes to them, based on what they told us.   Our aim throughout the process has been to cause as little disruption as possible – financially and in other ways to our staff, and to our frontline services.  This means that we can sustain the scope and quality of our services for local people in the long term, within the financial constraints placed on us. 

“Some of the changes (such as an increase in annual leave) will offer many staff more flexibility in their working patterns, but the prospect of a pay cut at a time like this has been hard for our staff.  I am confident that these changes will be in the interest of our staff in the long term because, by making sacrifices now, they reduce insecurity about future employment. We have no plans to make further changes of this kind.”

The Council’s Leader, Keith Barrow, said:

“This is not a step we have taken lightly.  When I became Leader, I was very explicit that there were going to be tough decisions ahead, and that the Council would not duck these.  At the same time, we will protect essential services for local people.  This decision has been made as the best solution to the financial situation we face.  We greatly value our staff, and the work that they put in to provide services for people all around Shropshire, but we had a stark decision to make about how to reduce our pay costs, which are our biggest single expense. 

“The Chief Executive will carry on discussions with the trade unions and I am hoping that, together, we can find solutions that are acceptable to all.”