Thanks to Retired Hack for this article looking at the implications of the chief executive actively being made redundant, rather than be allowed to retire as he had planned to do this year. Ed
With IW Council chief executive Steve Beynon’s redundancy rubber-stamped (by the Conservative ruling group) at Full Council, questions surrounding the cost to the public purse of the exercise – and the reason for paying him anything at all – remain unanswered.
Mr B has long been on record as saying the he planned to retire.
IWC failed to answer simple questions
The Council has for over a month failed to answer OnTheWight‘s questions on the financial implications of his deal, despite saying that they’d look in to it and us sending them multiple reminders.
Retirement = zero cost. ‘Redundancy’ is different
Retirements cost an employer nothing, and Mr B, now in his 60th year, is eligible for a pension which will certainly exceed the salary of most of his employees. So we were keen to learn why, in spite of the impending “retirement” being publicly discussed and officially acknowledged, it was decided at a late stage to offer Mr B a redundancy package which implies payments of many more thousands of pounds – most of it for payment in lieu of notice.
Instead of responding to OnTheWight‘s reasonable questions, the Council’s communications department, which takes its orders directly from Mr B himself, made a statement to the County Press which raised more questions than it answered.
They said the chief executive would receive a statutory redundancy payment of £13,050, based on his age and length of service, and that in this respect he would be treated like any other Council employee.
Fact checking
That part of the calculation is easy to check. Statutory redundancy payments are related to salary, but capped, for those on large salaries such as Mr B’s £150k, at £450 per full year’s service, with an additional £225 for each year’s service over the age of 41. Like all local government officers, he is entitled to have service with previous local government employers included in calculating total service.
The figure of £13,050 is therefore derived from two years’ service before age 41, plus 18 years’ service after age 41. £900 (£450 x 2) plus £12,150 (£675 x 18) – equating to £13,050.
Not just £13k. What about Statutory notice payment?
That, however, is only part of the story and, we believe, the least-expensive part by some distance.
The Council’s statement to the County Press continued: “He will be paid for his statutory notice period, which can only begin upon the decision to delete the post being ratified by full council.”
We estimate £47,000 payout
OK. “Statutory notice”, like statutory redundancy pay, offers some protection for long service, but is capped at 12 weeks’ pay. The good news for Mr B, but less good for the rest of us, is that 12 weeks’ pay for a man earning £150,000 amounts to £34,000 or so. It’s unclear whether we shall see much work for that money.
A Contractual Notice could bring even high costs
The statement to the CP does, though, imply a couple of further interesting things. First, statutory notice pay is only paid if the employee doesn’t have something better in his or her contract of employment. For example, if Mr B’s contract stipulated a notice period of three months (13 weeks) or more, then that is what he would have to be paid for. That’s called “contractual notice”, not “statutory notice”. The Council says it’s paying only statutory notice. We find that a bit surprising, and we shall keep an eye on it.
And here’s the other interesting bit. It’s now being claimed that the statutory notice period can only begin from last week, after Full Council ratified the redundancy. We believe this to be disingenuous, for two reasons.
A rushed decision?
Firstly, the management reorganisation now underway has been planned for many months. Before Christmas, finance director Dave Burbage gave a budget presentation to the IW Association of Local Councils which envisaged £1m savings in 2013-14 from “Back office cuts/Management structure”. It would surely, therefore, not have been too much to ask for the process to have been scheduled in a way which allowed Mr B to be given notice – and work it – before March 31, rather than have to be paid after March 31 for not being there and not doing any work.
And secondly, even if that was too difficult, why could he not have been put on notice of redundancy immediately after Christmas, even if the final decision had yet to be taken? This is called protective notice, and is very commonly used by employers who believe they may need to make people redundant but aren’t sure. It can always be withdrawn if plans change.
Covering departing colleagues, a common occurrence
The Council felt the need to remind the CP that Mr Burbage had agreed to assume the chief executive’s responsibilities without an increase in salary until a replacement is appointed. Well done Dave B, but this is a perfectly common occurrence in the real world, where those left behind have to do the work when someone gets the sack.
It’s a device normally used to save money (in the IW Council’s case, our money) rather than to justify putting it in the pocket of the guy you’re getting rid of. In the same vein, the long-term annual saving of abolishing the post – £210,000 – is held up as a justification for spending money which doesn’t need to be spent to achieve that saving.
Other questions still hanging in the air
There are a couple of loose ends which remain untied as a result of the IW Council comms department’s vow of selective silence.
How much shall we see the outgoing boss at County Hall during the month of March?
Might he perhaps have leave due which can serve as an invisibility cloak as the local elections rise up the agenda, along with the need for politicians to find a way of focussing criticism of the Council’s record on someone other than themselves?
£47k for a month’s work
£47,000 for a month’s work at most, perhaps less, may not seem like a great deal of money to those who cooked up this deal – it’s not their money, after all – or to Steve Beynon himself. He quite possibly thinks he’s worth it. That’s a matter of opinion.
£47,000 = A whole street’s Council Tax for a year
What’s a matter of fact is that £47,000 is a whole street’s Council Tax for a year, and quite a long street at that. It could pay for people on much lower wages than his to look out for our kids and our old folk. It could pay to plug some of the gaps left in our social fabric by the assault on our libraries, our loos, our tourist offices. It’s a decision which says a great deal about our leaders’ priorities, and not in a nice way.
The Council could have saved £34,000 of that £47,000 just by being competent. It’s difficult to avoid the conclusion that, for some reason, they didn’t particularly want to be competent on this occasion.
Of course, Steve doesn’t have to take the money …
And Steve Beynon himself, who in a spat earlier this month about media comments on education failings let slip that he felt he was “sufficiently well rewarded” by the Council, could have saved us the other £13,000, just by remembering what he’d said, and by doing what he’d kept saying he was going to do. Just walking.
IWC Openness – What openness?
It’s a sad indictment on the lack of openness at the Isle of Wight Council that this speculation – even if it it informed speculation – needs to occur at all. Of course, if the Council’s comms department actually did the job they are being paid for – to communicate – none of this would be needed.
After all, why should any of this be kept secret?
If publishing this article does finally move the council into action, we’d be happy to publish the response to our month old questions.
