A Midland council which invested £9million in a failed Icelandic bank is set to make drastic cuts to its workforce with up to 125 jobs feared to be at risk.
Wyre Forest District Council, which employees more than 450 people in North Worcestershire, yesterday appealed for staff to apply for voluntary redundancy as deputy leader Marcus Hart admitted the authority was “in the grip of the global economic downturn”.
The council has so far refused to release any figures on the number of jobs at risk or the amount of money they are looking to save although opposition leader, Coun Howard Martin, believes it could be up to a quarter of the workforce and more than £1million.
Coun Martin (Independent Health Concern) said: “The council needs to be much clearer otherwise more questions will be raised and people will become very worried.
“If you take into account the drop in interest rates and the amount of money lost from investment in Iceland then the council could be looking to make up to £1.3million savings.
“If that all came from staff cuts then we would be in a very difficult position.”
Wyre Forest District Council is currently trying to recover £9million from Icelandic banks including £3million in Landsbanki, £5million in Kaupthing, Singer & Friedlander and £1million in Heritable.
Workers at the council now have just one week before they must indicate whether they wish to leave or not.
The ruling Conservative Party blamed a slump in property prices, a drastic fall in interest rates and a small central government grant for the cuts.
But they would not be drawn on the amount they need to save, saying only that the number was “substantial”, despite claims they did not know the exact figures.
Coun Hart said: “The credit crunch means that we have to redouble our efforts to become more efficient and the cabinet is working closely with corporate management team to see where further savings can be made. This includes a review of divisional management structures.”
The budget proposals will be formally announced on January 22 at the cabinet meeting with the final decision being made at full council on February 25.