In July they provisionally set aside £2 million for redundancy pay-offs this year, but just two months later, they say that they need to increase the figure to £6 million.
The move – laid out in an amendment to their own financial plans for the next few years – follows the news that 104 of 329 applications for Voluntary Redundancy have already been approved.
It’s not clear in the amendment whether the increase is needed because ministers had underestimated the cost of paying off staff and paying up their pension contributions, or whether it’s because more people than expected volunteered to go.
But there is a major hint in the plans that the redundancy drive, including the beginning of compulsory redundancies, will start next year, because ministers want a further budget of £16 million for redundancy pay-offs in 2016.
Although the figures are significant, next year’s £6 million investment would quickly be paid off by the savings from the States’ pay bill.
At the average States salary – £46,800 per year, as of June – the loss of the 104 staff, who total around 80 full-time equivalents because of the part-time staff included, would mean a recurring annual saving of £3.7 million. At that rate, the £6 million investment would be covered in just under two years and the annual savings would start to reduce the deficit.
Even then, the savings are a long way from the £70 million that ministers hope to cut from the States’ wage bill to balance the books by 2019.
States Members will debate the proposals in the Medium Term Financial Plan, which goes to the States Chamber in early October.