Crisis council could pay firm £2m

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A local authority could end up paying consultants more than £2m to help it shed almost a fifth of its workforce - a move it said would help cut costs.

Oldham Council last week revealed up to 850 jobs could go as part of attempts to tackle a £17.3m budget deficit.

The Liberal Democrat-controlled authority is paying consultants KPMG to help it address the problems.

Opposition party Labour has described it as a "slap in the face for staff facing redundancy".

The authority is Oldham's biggest employer with nearly 5,000 staff.

Councillors met trade union representatives on Thursday to discuss the proposed cuts, and staff found out when they arrived at work on Friday. This is recognition by the council that challenging times are before us Howard Sykes, Council leader

KPMG, the financial and management consultancy firm, is to work with council officers over the next two years.

The authority said the firm had a track record in making council budget savings and had advised a number of other authorities on running "more efficiently and effectively".

KPMG has been employed on a performance-related basis, with an initial payment of almost £227,000 and possible bonus of £2m.

Councillor Jim McMahon, leader of the opposition Labour group, said: "This effectively puts a price on the head of every member of the council workforce in Oldham and will damage staff morale even further.

"It will also outrage Oldham's council tax payers who will resent these huge bonus payments to expensive consultants."

But council leader Howard Sykes said hiring KPMG was a "brave move" and would ensure that council tax payers got value for money.

"This is recognition by the council that challenging times are before us," he said.

"It's best that we bring in experts to support and help us plan the way forward. The council and our officer team will be working closely with KPMG."