Words by Erdington Local editorial team
Birmingham City Council (BCC) has scrapped a voluntary redundancy scheme offered to all employees in August as it cannot afford to implement the agreements.
Earlier this year, the cash-strapped authority offered every BCC employee the option of taking voluntary redundancy ahead of the potential compulsory job cuts needed to prevent the council going bust.
All the reported 10,600 employees at BCC were told in an email, sent just before last August Bank Holiday, that they could sign up for the city’s Mutually Agreed Resignation Scheme (MARS).
However, in an email to workers sent this morning (Friday 17 November) the Council’s Chief Executive Deborah Cadman informed them now no-one can take the offer due to the cost of implementing the scheme.
A Birmingham City Council spokesperson verified: “We can confirm a decision has been made to stop the MARS process meaning no MARS applications will be approved. This was a collective decision made by the Corporate Leadership Team and the Commissioners.
“As part of our financial recovery, the council is focused on making savings and any decisions made need to consider our current financial position. The cost of MARS was far greater than we anticipated and therefore could not guarantee we make financial savings we need.
“The council is currently in a very different situation from when we first announced MARS, and we must take a more considered and stringent approach to our budget challenges and any changes to staffing.”
Birmingham City Council, the biggest local authority in Europe, has been facing a serious financial crisis over recent years.
On 5 September, the Interim Director of Finance, Fiona Greenway, issued a Section 114 notice – effectively declaring the city bankrupt and confirming the city did not have enough reserves to balance its books. Factors including historic equal pay discrepancies, which could cost the Council hundreds of millions in backdated claims, and the ill-fated Oracle IT system were heavily referenced.
The Section 114 notice issued on 5 September, and further notices issued by city officers, prompted intervention from the Department for Levelling Up, Housing and Communities (DLUHC) in Westminster – with the government then appointing a team of external commissioners, led by Max Caller, to address the financial crisis at Birmingham City Council.
The MARS scheme was created to help reduce the wage bill amid these financial pressures and to tackle the rocketing costs of dealing with issues and support around homelessness, adult care, and children’s services.
Since being given the option of the MARS scheme, Birmingham City Council workers, many of whom have given decades of service to the city working within theSe sectors, have been weighing up whether to accept the voluntary redundancy offer.
Now those who decided to leave the council have had their plans thrown into turmoil due to the U-turn made over MARS, even after they were allowed time to calculate the redundancy pay off they would get under the scheme and start planning their retirement or new career path. Many now fear they will get reduced terms if they are made redundant.
One BCC employee in Kingstanding, who did not want to be named, told Erdington Local: “I cannot believe this has happened. I have had so many sleepless nights making this decision, which is one of the biggest decisions I’ve ever had to make in my life.
“I did not know whether to stay in the job I like, but which I could lose in future redundancies or leave with a pay off.
“I decided to apply for MARS, I’ve made plans to take a break and then retrain in a different role. And now after all that I’ve been told they cannot afford to offer anyone MARS. They are playing with people’s lives; I am in shock today.”
If you have been affected by any of the financial issues currently facing Birmingham City Council, please get in touch with Erdington Local at firstname.lastname@example.org