Management Information Sheet

Why we consulted

Norfolk County Council undertook this project to review Schools Early Retirement and Redundancy Payments. The project was initiated following Norfolk's Big Conversation consultation and was established to meet the challenge of the Comprehensive Spending Review targets set by Central Government.

The project objectives were:

	To make identified savings of £635,000 per year (£520,000 per year reduced provision for additional school staff early retirement and redundancy costs and £115,000 per year no inflation for existing early retirement costs) for three years from 2011/12 to 2013/14.
	To identify potential options for future pensions mechanisms for school teachers and school support staff
	To establish a clear process for controlling early retirement and redundancy costs for schools, considering the annual budget in totality rather than drawing down against the budget on a case by case basis.

The proposals were developed to help meet these objectives and the views of stakeholders were sought.

Who was consulted

We consulted with the following groups:

	SNAPP
	NASH
	NASSH
	Schools' Forum
	Norfolk Governors Network
	JCC/JCNC
	Headteachers/ school governors
	Other stakeholders including LA service providers such as HR consultants and Schools' Finance staff

How we consulted

We sent our consultation document to stakeholders. We also consulted stakeholders face-to-face at meetings of relevant groups.

When we consulted

The consultation period ran from Monday 2^nd May 2011 until Friday 22^nd July 2011, with a final date for receipt of written responses of Friday 29^th July 2011.

What was already decided / what we wanted to find out

Norfolk County Council agreed to reduce the budget for school staff early retirement and redundancy related costs by £635,000 each year for three years from April 2011. The proposals that were consulted upon were based on how we thought it best to make the savings.
We sought the views of stakeholders on:
- The impact of specific, individual proposals
- Any areas we could explore for savings that we may have missed
- The balance of savings between the individual proposals

Who made the decision on which proposals to recommend for implementation

- A Project Board, comprising senior LA officers, and chaired by the Assistant Director (Strategy & Commissioning) considered all responses and took account of people's views as part of the decision-making process.
- Final decisions for implementation were based on the required budget savings being achieved.
- The final decision paper will go to the Joint Consultative Committee (JCC) to note and for comment, and will then be presented at the Overview & Scrutiny Panel.

Outcome of Consultation and Clarification of Proposals to be Ratified and Implemented

Responses to the Consultation
Responses were received from 9 sources, either as representatives of a group of stakeholders, or as individuals who wished to comment.
The respondees were:

1	NUT Divisional Secretaries
2	Headteacher, Sprowston High School
3	Headteacher, Taverham Junior School
4	Governors' Personnel Committee, Acle High School
5	Norfolk Governors' Network
6	NASUWT regional officials
7	Headteacher, Kind Edward VII High School
8	Schools' Finance Team
9	Unison Branch Secretary

All of the responses were carefully considered, and the views of those responding taken into consideration when reviewing the final recommendations. Overall, however, the responses did not lead the Project Board to believe that there was any reason to revise implementation of the proposals as listed below.

Proposal 1a: Teaching Staff Enhanced Early Retirements.
It was proposed to remove the option for teaching staff to apply for enhanced early retirement (i.e. not actuarily reduced), with effect from 1 September 2011, except where the Local Authority would have residual powers to grant enhanced early retirements i.e. where there has been school reorganisation, amalgamation or closure.
NB No change can be made to school support staff enhanced early retirements, as the arrangements are currently mandatory.

Responses from consultees included the concern that this proposal was not in line with the arrangements for school support staff. However, the Project Board concluded that in effect of the proposal was NCC applying the current rules of the Teachers' Pension Scheme and the Local Government Pension Scheme rather than treating staff differentially.
The Project Board also considered other options for funding early retirements, should they continue to be accepted. In line with DfE guidance, all other options would require funding to come from the schools, either as a direct and ongoing charge to individual school budgets, or from the top-slicing of the Dedicated Schools Grant before it is distributed to schools via the budget share funding formula. The Project Board concluded that there was no other acceptable option that could be imposed on schools, as it was deemed that this would impose too high a risk of a long-term unsustainable impact on school budgets that would be beyond the control of individual governing bodies.

It was noted that implementation of this proposal will not affect the position of those teaching staff retiring early through ill health, or those teaching staff choosing to retire early on actuarily-reduced pensions. The Local Authority will also retain the residual power to grant early retirements i.e. where there are school reorganisations, amalgamations or closures.
The Project Board therefore agreed to ratify this proposal, to come into effect from 1 September 2011.

Proposal 1b: Teachers' Pension Strain
It was proposed to increase the budget for teachers' pension strain from financial year 2011/12, in order to cover the current and ongoing annual cost.

The Project Board recognises that this budget must be increased in full in 2011/12 in order to meet the current and ongoing annual costs.
The Project Board therefore agreed to ratify this proposal, to come into effect from 1 September 2011.

Proposal 1c: Teaching Staff Early Retirement Lump Sums
Assuming the implementation of proposal 1a, it was proposed to reduce the budget for teaching staff early retirement lump sums in financial year 2011/12, and remove the budget for financial year 2012/13 onwards, as it was believed that it should then become obsolete. It was agreed that any future costs associated with school reorganisations, amalgamations or closures would be charged to the teachers' pension strain budget.
This proposal is reliant upon the ratification of proposal 1a. On that basis, the Project Board agreed to ratify this proposal, to come into effect from 1 September 2011.

Additional proposal: Proposal 1d: Introduce a redeployment register for teaching staff
In order to reduce some of the identified risks associated with the removal of the option for enhanced early retirement for teachers, it is proposed to introduce a redeployment register for teaching staff at risk of redundancy. The register would be managed by an experienced senior HR professional to ensure that redeployment opportunities are identified, staff at risk of redundancy are identified and supported through the process, and schools receiving redeployees are supported through the process.
Although there would be a cost attributable to the setting up, staffing and maintenance of the register, it was felt that, as this has the potential to reduce the number of redundancies, the cost could be met from savings in that area.
The Project Board therefore agreed to ratify this proposal, to come into effect from February 2012.

Proposal 2: Teaching Staff Redundancy Payments.
Assuming the implementation of the proposals in 1a - 1d, it was proposed to increase the budget for teaching staff redundancy payments, with effect from financial year 2012/13, but use a defined protocol for assessing the cost effectiveness of applications with effect from 1 September 2011.

The Project Board agreed that, with the implementation of proposal 1, there would of necessity be the requirement to increase this budget, at least until the proposed teaching staff redeployment register has time to embed and become as effective as possible.
See Proposal 8 for more details of the revised protocol for assessing applications from school for LA financial support for redundancy payments.
The Project Board therefore agreed to ratify this proposal, to come into effect from 1 September 2011.

Proposal 3: Teaching Staff Compensation Payments.
It was proposed to reduce the cost of teaching staff redundancy payments, with effect from 1 September 2011, by ceasing to pay compensation where teachers have their contracted working hours reduced, but where they remain employed.

The compensation to school staff for a loss in hours is anomalous within schools, as other NCC employees do not receive such payments. The Project Board concluded that, by addressing this anomaly, it would bring school staff into line with all other NCC staff. The Project Board acknowledged the risk that school staff may be less likely to volunteer for a reduction in hours, but did not agree that this was sufficient grounds for school staff to be treated differently to other NCC staff.
The Project Board therefore agreed to ratify this proposal, to come into effect from 1 November 2011.

Proposal 4: School Support Staff Redundancy Payments.
It was proposed to reduce the budget for school support staff redundancy payments, with effect from financial year 2011/12, to bring it into line with forecasted budget requirements following the change in Norfolk County Council policy.

The change in legislation from April 2010, which reduced the redundancy payments to all local government support staff, had not been reflected in the budget figures. The Project Board therefore concluded that the budget saving anticipated for financial year 2011/12 was reasonable and achievable, and did not impact on staff in schools.
The Project Board therefore agreed to ratify this proposal, to come into effect from 1 September 2011.

Proposal 5: School Support Staff Compensation Payments
It was proposed to reduce the cost of school support staff redundancy payments, with effect from 1 September 2011, by ceasing to pay compensation where support staff have their contracted working hours reduced, but remain employed. It was consequentially proposed to reduce the budget in full with effect from the 2011/12 financial year.

The paying of school staff for a loss in hours is anomalous within schools, as other NCC employees do not receive such payments. The Project Board concluded that, by addressing this anomaly, it would bring school staff into line with all other NCC staff. The Project Board acknowledged the risk that school staff may be less likely to volunteer for a reduction in hours, but did not agree that this was sufficient grounds for school staff to be treated differently to other NCC staff.
The Project Board therefore agreed to ratify this proposal, to come into effect from 1 September 2011.

Proposal 6: School Support Staff Pension Augmentation
It was proposed to remove the budget for school support staff pension augmentation, with effect from financial year 2011/12. It is envisaged that the requirement for these payments will cease, and it will therefore become obsolete. It was agreed that any future costs associated with school reorganisations, amalgamations or closures would be charged to the teachers' pension strain budget.
The Project Board therefore agreed to ratify this proposal, to come into effect from 1 September 2011.

Proposal 7: Reduce the cost of Severance Payments
It was proposed to reduce the budget for severance payments, with effect from financial year 2011/12, following the removal of the need to fund 50% of the costs associated with staff redundancy in schools that convert to Academy status.

As this requirement for funding has ceased, the Project Board felt that this budget saving was reasonable and achievable, and did not impact on staff in schools.
The Project Board therefore agreed to ratify this proposal, to come into effect from 1 September 2011.

Proposal 8: Redefine a protocol for assessing cost effectiveness of applications for redundancy
HR and Finance officers work collaboratively to identify schools at high risk of requiring staffing adjustments. It was proposed that this protocol should be enhanced by redefining it to include further challenge on the reasons for staffing adjustments, and the cost involved to the LA of any proposed course of action.

Senior officers from the Schools Finance Team and HR Consultancy Team have agreed a revised protocol for the early identification of schools where there is risk of staffing adjustments being required. The risk will be rated according to the likelihood of those adjustments being required (i.e. Red for 'definite'; Amber 1 for 'likely'; Amber 2 for 'potentially'; Green for 'not required'). A copy of the revised protocol is attached at Appendix A.
All applications are to be accompanied by detailed financial information, and they will all be scrutinised by a panel of senior Local Authority officers, representing Finance, HR and CS management team. In this way, it is intended that all applications will be measured by the same objective application of criteria, in order that informed decisions may be made, and the reasons for those decisions communicated in a timely manner to all relevant parties.
The Project Board therefore agreed to ratify this proposal, to come into effect from 1 September 2011.

Summary of overall potential budget savings, when compared to 2010/11 costs:

		2011-12 £	2012-13 £	2013-14 £
1a	Early retirement (teaching staff)	0	-493,000	-493,000
1b	Teachers pension strain	250,000	250,000	250,000
1c	Early retirement lump sums	-50,000	-234,000	-234,000
2	Redundancy payments (teaching staff)	0	280,000	280,000
3	Removal of compensation for reduction in hours (teaching)	-25,000	-50,000	-50,000
4	Redundancy payments (support staff)	-644,000	-644,000	-644,000
5	Removal of compensation for reduction in hours (support staff)	-50,000	-100,000	-100,000
6	Support staff pension augmentation	-30,000	-30,000	-30,000
7	Severance payments	-100,000	-100,000	-100,000
Totals		-649,000	-1,121,000	-1,121,000

9.0 Other Considerations

The Project Board considered other options and suggestions, but most would not have enabled NCC to make the necessary savings.

One of the options considered was to look at the introduction of flexible contracts for teaching and support staff. This would enable school leaders to vary contracted hours by a maximum of a set percentage, as an alternative to awarding additional hours only for them to be redundant at a later date. Responses from the consultation varied, from the generally positive to the extremely negative. The Project Board considered that this option, whilst potentially offering a solution for the future, would require further detailed work and consultation before it could be put forward for implementation. HR colleagues will therefore include this area in future workstreams.

10.0 Implementation

10.1 The Project Group agreed to the implementation of the 8 proposals, within the timescales identified.

10.2 Timeline for consultation, ratification and implementation process

Project Group final report released	3rd February 2011
CSLT Meeting to agree proposals for consultation	15th February 2011
Implementation of budget savings for proposals with full-year savings identified	1st April 2011
Consultation with Schools' Forum/ JCC/ JCNC/ NGN/ SNAPP/NASH/NASSH/ elected members	2nd May - 22nd July 2011
Consultation with wider stakeholders (heads/governors etc)	2nd May - 22nd July 2011
Deadline for written responses to consultation	29th July 2011
Project Board consider consultation responses	August 2011
Implementation of budget savings for proposals with part-year savings identified	1st September 2011
Project Board meet to agree and ratify final decisions for implementation	16th September 2011
JVV receive final decision paper for information	October/November 2011
Overview & Scrutiny Panel receive final decision paper to note and for comment.	November 2011

Further Information
Further information, if required, can be obtained from:
Letter:
Alison Randall, School Support Manager,
Schools Finance Service, Room 047,
County Hall, Martineau Lane, Norwich. NR1 2DL.

E-mail: Alison Randall

Appendix 1



The following protocol will be followed by officers from the Schools Finacne Team when supporting schools in financial management and budgeting activities.
Agreement of the protocol has been reached between HR Consultants and School Finance Team Managers. HR will change the wording in all their documentation to reflect the protocol, and will issue an MI sheet in the autumn term 2011 (and as agreed by SFT). All letters to school leaders and staff potentially affected by staffing adjustments will reflect the change in expectations, i.e. all consultations and requests for information will make it absolutely clear that the financial situation in schools is fluid, and is therefore subject to change prior to the finalisation of any offers.

To ensure that the information being given to HR and SFT is transparent and meets the minimum requirements for considering redundancy etc, Finance Support Officers will be required to amend the way they report potential staffing adjustments, as follows:

1)	Notes from the Autumn Term visit should clearly show the necessary adjustments and details of the discussion with the school.
2)	Under the note of discussion section of the Autumn Term Visit notes the school should be rated as follows:

	GREEN	No adjustment will be required
	AMBER 2	Consideration of possible adjustments, i.e. PSF leavers/joiners and associated staff. Possibility of pending notices (i.e. expectation of retirement resulting in 'natural wastage' etc)
	AMBER 1	Consideration of likely need for adjustment i.e. more likely than potential, but not absolutely definite
	RED	Definite adjustment will be required i.e. loss of a class base, loss of SRB etc.

3) For all schools that have a rating of Red and Amber 1, the school MUST complete a 'Do Not Change' budget plan that shows the impact on the budget of not undergoing a staffing adjustment.

4) The school MUST complete a 'Staffing Adjustment' budget plan that shows the impact of including the proposed staff changes.

5) Both the budget plans MUST be presented to governors, and their discussions, including the agreement of governors to commence a staffing adjustment procedure, must be shown in the minutes of the meeting. The 2 budget plans should form appendices to the minutes.

6) Both budget plans and relevant staffing spreadsheets should be sent in to Finance Support, and electronic copies of both placed in the schools' folder on the LA server.

NB The above information will be required by the LA in order for HR/Finance Managers to be able to consider requests for funding of redundancies etc.

7) The FSO should reflect the staffing adjustment rating in the schools' main RAG rating in the relevant criteria section.

8) The FSO should pass a copy of the Notes of Visit, the 2 budget plans and the relevant staffing spreadsheets to HR via the route previously notified. The SFT Finance Officer will send them up to HR (via a senior manager) every week. It is therefore important that FSOs provide them within 10 working days of either a visit, or, for non-Autumn-term visits, receipt of a budget revision.

9) The above protocol will need to be repeated for Red and Amber 1 schools in the first half of the spring term. Any schools that become Red or Amber 1 (that previously were Amber 2 or Green), will also need to follow the protocol.

10) The above protocol will then need to be repeated at original budget setting for the following financial year for schools rated Red or Amber 1, or schools falling into those categories for the first time.

11) The HR contact will check the paperwork submitted, but will not necessarily contact the schools directly. It is therefore important to advise schools that appear to need staffing adjustments, particularly those rated Red or Amber 1, to contact their HR consultant to commence the process.