BCP Council equates living wage rise to 120 job losses

Councillor Mike Cox said the local authority was facing a much bigger financial challenge

A council facing a £44m budget deficit says the announced increase in the National Living Wage has widened its financial blackhole by £5.6m.

Bournemouth Christchurch and Poole (BCP) Council is proposing a number of cuts amid fears of a bankruptcy notice.

Finance councillor Mike Cox said the cost of a minimum wage rise in April would be equivalent to 120 job losses.

At a cabinet meeting, councillors unanimously voted to approve a targeted voluntary redundancy scheme for staff.

Delivering BCP's mid-term financial position on Wednesday, Mr Cox said the government's announcement to increase the National Living Wage by an "inflation-busting 9.8%" would "increase our 2024/25 budget gap by £5.6m".

"This is equivalent to 120 additional job losses or withdrawing the whole of our cultural grant four times over," he said.

"We must now aim for £50m, not £44m."

'Wrong decisions'

Mr Cox said the rise was "fantastic news" for employees but added: "Without adequate compensation to councils, the list of councils being issued with Section 114 [bankruptcy] notices will only grow."

The report - written before the minimum wage announcement - recommended "a voluntary redundancy process is established" with the final criteria to be agreed by the chief executive.

It said the scheme would not be applied to "certain elements of the workforce such as social workers".

Mr Cox warned a Section 114 notice - usually issued when a council's expenditure exceeds its income, which is not permitted under law - should be avoided at "all costs".

He said: "What happens is that government commissioners are called in to take on decision making.

"Local decision making will end. I can guarantee the wrong decisions will be made at the wrong time."

A council spokesperson said: "We are having to explore every option in order to achieve a balanced budget. One of these options is recommending a targeted voluntary redundancy programme.

"We will carefully consider the details of any such scheme."

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