Commission: voluntary exit programme is good value for money

11 Jul 2013 News

The Charity Commission has defended its voluntary redundancy scheme as good value for money for the taxpayer, insisting that it has already paid for itself and will deliver further savings of £4m a year going forward.

Charity Commission in Liverpool

The Charity Commission has defended its voluntary redundancy scheme as good value for money for the taxpayer, insisting that it has already paid for itself and will deliver further savings of £4m a year going forward.

Earlier this week civilsociety.co.uk reported that the £4.3m cost of making 129 people redundant between January 2011 and March 2013 had so far delivered just £3.3m in savings to the Commission’s wage bill.

But the Commission has pointed out that if the social security and pension costs of those employees are taken into account, the saving rises to £4.2m, just short of the £4.3m cost of the severance packages.

A spokeswoman for the Commission also added that the regulator expects a further £4m in savings will accrue each year from now as a result of the job cuts, so it is confident that this represents “good value for money for the taxpayer”.

Size of payments 'like banking sector'

The regulator also sought to defend the size of the severance packages agreed, after some readers of Tuesday's story were aghast at the amount of some of them.

In the same week that the BBC and the NHS have come under fire for their redundancy programmes, the Commission revealed that one of its severance payments was in the range £150,000-200,000; three were between £100,000 and £150,000, and 26 ex-employees were given payments of between £50,000 and £100,000.

Social entrepreneur Sally Smith commented that statutory redundancy pay would be between 0.5 and 1.5 weeks pay for every year worked, dependent on age, so the Charity Commission's average redundancy payment of £33,000 across all 129 employees would equate to the average employee working for 20 years on a final salary of £85,000.

"Why in times of austerity and dramatic cuts have the Charity Commission been so very generous in their redundancy payouts?" she said.

Steve Edwards described the amounts as "ludicrously excessive" and "more like the kind of redundancy payments that you would expect in the banking sector".

Commission: Many staff gave long service

In response to a question from civilsociety.co.uk about how many of the severance packages exceeded the statutory minimum, the Commission spokeswoman said that the statutory redundancy scheme does not apply to civil servants.

Instead, all civil service exits are governed and calculated in line with the Civil Service Compensation Scheme (CSCS),  which sets out the level of compensation that departments can pay their staff if they leave under voluntary or compulsory redundancy.

"None of the package payments went beyond the terms of the CSCS," the spokeswoman said. "Many of our staff have given very long service; this is why some of the awards were quite significant."

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