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Council cuts to cost £20m more than planned saving

COMPENSATING 1000 workers for the loss of their jobs at Scotland's largest council will potentially cost about £20 million more than it plans to save.

Up to £70m will have to be spent offering severance packages to those staff earmarked for redundancy as part of £50m of cutbacks at Glasgow City Council over the next two years.

Although the local authority has the funds to meet the cost of the lay-offs, city chiefs are exploring the possibility of selling some offices and facilities to the private sector in a lease-back deal.

The final round of redundancies will be paid by effectively remortgaging many of its properties for around £120m.

Details are revealed in a new report on the latest round of pay-offs. It states that, for every reduction of 100 posts, the annual gross saving is estimated at £4m, with initial outlay up to £7m.

With all of Scotland's 32 councils to reveal in the coming months and weeks where they will be making hundreds of millions of pounds worth of cuts, it has been estimated an additional 1000 jobs at Glasgow could go between the end of this year and next April. But senior council sources believe the actual figure could be closer to 600.

Meanwhile, unions representing the majority of council workers in Glasgow have called on councillors to reject plans for more redundancies, urging them to "use all available financial mechanisms to hold off any further cuts, while building a campaign to win back the money stolen from the city".

At a meeting where the plans are expected to be passed, the opposition SNP group will demand the Labour administration produces business cases for all senior staff wanting to go in this latest round of cuts amid concerns departing executives are simply being replaced by others on the same pay scales.

The Herald revealed last month that Glasgow, which has had almost 3000 staff leave since 2010, is to try saving £48.8m between 2013 and 2015.

It is also understood the council will enter into a joint venture with the private sector to deal with street lighting and roads maintenance.

North Lanarkshire was the first council to outline where the axe is expected to fall as it strives to make £74m of cuts in the next three years, while Renfrewshire is also planning redundancies as it seeks savings of £16m.

Unlike Glasgow's last trawl for voluntary redundancies, employees of all ages will be invited to apply.

Senior officials have said there is an appetite among staff to take a package and that calls by unions for councillors to halt the process would backfire.

Unison's Glasgow branch secretary Brian Smith, on behalf of the three main unions, said: "There is no more room to cut. More than 2500 jobs have already been cut since 2010, more than 10% of the workforce.

"We strongly urge all the political groups to refuse to cut any more council jobs.

"Elected members have a choice – make the cuts or demand an end to the slash-and-burn austerity policies and fight for a return of the tens of millions stolen from Glasgow in the past few years."

SNP group leader Graeme Hendry said: "The administration needs to be able to show that all voluntary severance is based on solid business case while protecting the front line and they should also look to create opportunity for modern apprentices to gain employment. It would be unforgivable if there was a further waste of millions on packages for senior managers where no savings are made."

Referring to its funding of the redundancies, a council spokesman said: "We've put money away for a rainy day – and this is a rainy day."

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Local government

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