AROUND 800 members of staff at South Lakeland District Council will bear the brunt of a £1million budget shortfall as authority chiefs announced a partial pay freeze yesterday.

The financial smack in the face, which will save the council around £300,000 this year, was announced to employees at their weekly briefing yesterday (Thursday) morning.

The freeze is on annual increments paid to reflect staff's knowledge, skills and ability. It does not affect the nationally-negotiated cost of living rise.

The measures have been taken after it was revealed in January that the authority's controversial new pay and grading structure was going to set the council back by £1.6million an extra £1million more than originally estimated.

As the announcement was made, staff were said to be shocked and upset.

Keith Dovastone, regional officer for Unison, said: "People are surprised. They feel it is a breach of good faith. We arrived at the pay and job evaluation system last October after considerable negotiation over years, through the proper processes.

"They feel let down and very upset. The council are coming back to take money away from them (staff) after they had arrived at such a position in good faith."

He added that union officials were due to meet the branch committee today to determine their strategy. He said it was too early to say if industrial action was on the cards.

Ken Lowe, regional organiser for the GMB union, disclosed that a series of meetings had been arranged between union representatives and SLDC chiefs over the following three Thursdays to discuss a new grading structure.

The new scheme was introduced in July, 2003 and was designed to ensure equality of pay across the authority. It would have drained council coffers by £300,000 per year for the next five years.

Commenting on the announcement, acting chief executive Mike Jones said: "It's fair to say staff are disappointed but there is an air of pragmatism. They understand it is a very difficult position."

He said the pay packets of around 65 per cent of the authority's workforce would have benefited from the new structure, with pay rises ranging from £60 to several thousand pounds.

"The pay freeze is going to be until we can agree (a new scheme) with staff and the trade unions and we are hoping to do that within the next six to seven months."

The acting council chief said SLDC's management team had considered various options to address the seven-figure deficit including raising council tax and cutting services.

Four months after the anomaly was discovered three high ranking officers at SLDC were suspended. It is understood the suspensions are linked to the results of an external investigation into the £1 million wages underestimation.

Prior to Tuesday's full council meeting, where councillors met behind closed doors to discuss ways of clawing back the cash, Westmorland Gazette reporters tried to persuade councillors to ask questions on behalf of the public about when the long-running issue was likely to be resolved. They asked whether the officers had been suspended on full pay, how much the investigation was costing and how much it was costing for other officers to cover for the suspended trio.

But not one of the councillors approached was prepared to break ranks despite sympathising with the view that the public had a right to know.

There was a feeling that if anything was leaked to the press it could prejudice the investigation that is being carried out. It is believed the three officers suspended are Chief Executive Philip Cunliffe, Finance Director Jack Jones and Human Resources Manager Andrew Taylor, although the council has refused to reveal this information.

Mr Jones asked if the public had a right to know what was being done with their money over and above whatever legal right to secrecy had been established. He replied: "At the end of the process they have got a right to know. We have got a district auditor who has got an official duty to take whatever actions she feels necessary, but she is satisfied at the moment at the way we are handling things." He said making a comment on the suspensions could affect the integrity of the suspended officers or the liability of SLDC.

Mr Jones added: "This is a very unusual set of circumstances. We are being told there are very few other authorities in the county who have been through this and we are being told that with three officers suspended the process is going remarkably quickly."

by Lisa Frascarelli and Mike Addison.