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£600m: The cost of austerity?

MORE than £600 million of taxpayers' money has been used to pay off Scottish public sector staff in redundancy, early retirement and other "golden goodbye" deals under austerity measures over the last five years.

The money – enough to pay the wages of 1100 nurses, teachers and police officers in every year since 2007 – was spent getting rid of 34,300 people from 180 public bodies, including the Government, councils, health boards, the police, colleges and universities, and 50 quangos. The average deal cost taxpayers £17,500.

The figures were obtained by Scottish Labour under Freedom of Information legislation.

Last week, the Sunday Herald revealed that the merger of Scotland's eight police forces into a new single force in April will result in a one-off £60m bill to axe 1400 civilian staff.

However, Labour said its figures suggested that, rather than being exceptional, redundancy costs were now a constant drain on the public purse.

Labour said using £600m to fire instead of hire when so many people needed jobs was "perverse".

Since 2007-08, some £274m has been used to shed 12,400 staff through voluntary redundancy schemes alone, equivalent to £22,000 per person.

A further £133m was spent on early retirement for 4940 workers, an average of £27,000 each.

And £42m went on secret compromise agreements with 10,773 staff – deals which could include a gagging clause – at an average of £3900 each.

Although the SNP has a policy of no compulsory redundancies for central government staff, other public bodies spent £7.5m sacking 1212 people over the five years, with the country's universities accounting for the largest block of compulsory lay-offs.

And £143m was spent on various other forms of severance for 5000 staff – an average of £28,670 per person – although this category includes all pay-offs by the Scottish Government, which chose not to provide a detailed breakdown.

More than half the £600m was spent in the years 2009-10 and 2010-11, when the recession led to a shrinking of public sector budgets, and many bodies sought to save costs by shedding staff.

The data also reveals the highest single pay-offs made by each public body over the five years.

The highest single award was a £533,800 exit deal at Labour-led South Lanarkshire Council for former finance director Linda Hardie, who took early retirement aged 50 in April 2011.

Other bumper severance packages include two early retirals each worth £275,000 at Strathclyde and West of Scotland universities, and a £206,000 compromise agreement by the Scottish Funding Council.

The figures, covering the financial years 2007-08 to 2011-12, also show the spending on pay-offs within the different arms of the public sector.

With almost 60% of public workers, councils accounted for the bulk of the bill – some £225m.

But with the SNP Government shielding the health service from cuts, the NHS accounted for barely 5% of the spending on lay-offs, despite employing around 30% of public sector staff.

The area with the highest relative costs was made up of central government, the Scottish Prison Service, Scottish Enterprise and quangos.

This group accounted for 12.8% of all staff lost, but 31% of the goodbye bill, with the average exit deal worth £42,475 – more than four times the average deal for a council worker. Pay-offs are related to salary, and central government has many high earners.

However, the sums do not always translate into immediate cash payments to individual staff, but are real costs borne by their employers, such as setting money aside to top up pension pots.

Labour MSP Ken Macintosh, the shadow finance secretary, uncovered the data through scores of Freedom of Information requests.

He said: "We are in the midst of the worst unemployment crisis for a generation and this government has spent more than half a billion pounds not on getting Scots into work, but on pushing them out the door.

"In one year alone, 2010-2011, the Scottish Government spent more than £200m getting rid of 10,000 people.

"What a perverse, misguided and fundamentally incompetent waste of taxpayers' money."

He said that while SNP Finance Secretary John Swinney's refused to find £35m extra funding for colleges in next Wednesday's final budget vote, the sector was spending £41m laying off staff.

Macintosh said: "John Swinney clearly thinks he can blame everything on the Tories and on Westminster, but this staggering increase in spending has happened under his allegedly 'prudent' stewardship.

"For two years running Mr Swinney has talked of a budget for jobs, but instead of spending money on wage subsidy or job creation programmes, he has spent £600m putting more people out of work."

However, Dave Watson, Scottish organiser of the public-sector union Unison, said the Scottish Government had few choices when the Westminster coalition was cutting budgets for "ideological reasons", and was actively trying to shrink the state.

He said: "The Scottish Government has a limited ability to take a different direction – the only people who can change the big picture are at the Treasury."

A spokesman for John Swinney said: "Public-sector employment is falling in Scotland as a result of the cuts in public spending applied by the Tory-led UK Government, who Labour are campaigning with in the anti-independence campaign.

"Despite these Tory cuts, the Scottish Government are committed to no compulsory redundancies as a means of supporting economic recovery and consumer confidence in Scotland.

"While we encourage councils to follow our lead, they are independent bodies, responsible for managing the terms and conditions of employment of local government employees.

"The costs of the Scottish Government voluntary exit scheme will be recouped in three years and will deliver recurring savings of £13m a year, as part of action to significantly cut our central spending. Last year alone we achieved savings of over £64m in our central spend."

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Local government

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