BOLTON Council will spend close to six and a half million pounds paying off staff as it launches a new adult services trading company, it has been revealed.

The authority’s published annual accounts show that £6.4 million has been put aside for adult services staff who were asked to choose to transfer to the new company or take voluntary severance or retirement.

The new Bolton Care and Support Ltd not-for-profit company has now gone live, with the aim of providing a range of care and support for adults in the community and the council is hoping it will save £11.6 million in its first five years of operation.

However, the published accounts have caused union chiefs to question the authority’s figures and claim that the business model is flawed.

In the annual accounts, it states that Bolton Care and Support Ltd staff currently working in the services who are transferring to the new company were given a number of options — including voluntary severance and early retirement or a one-off settlement payment to transfer to the new, lesser terms and conditions being offered at the company.

The statement reads: “In May the official offers were sent out and during June there have been legal briefings in which staff have had to decide which option they prefer.

“Based on the information to date it is estimated that the cost of the options taken by staff will be £6.4 million. A provision has now been created to this value rather than a reserve.”

The council has refused to give specific details about the number of staff who have chosen specific options and said that while the initial outlay ‘may seem like a large amount’ — it will ultimately save the authority a lot of money.

A council spokesman said: “We anticipate the net savings to the council over the initial five years of trading should be around £11.6m.

“So, while the initial outlay may seem like a large amount, it enabled us to move forward with the concept of a local authority, not-for-profit trading company that will ultimately save the council a significant amount of money.

“These are one-off costs in order to save services for our most elderly and vulnerable residents to whom we have a duty of care.”

He added: “In setting up the new company we felt it imperative to create a strong and stable workforce, with good pay and conditions, as this would reflect on the quality of care received by our service users. The new company gives us the option to make significant financial savings without the need to close down or privatise services.”

The council’s biggest union, Unison, has consistently and strongly opposed the creation of the new adult services company since it was first mooted.

The union sent a letter to all councillors last year, estimating that the cost of launching the new company would be around £10 million.

Branch secretary Bernadette Gallagher said: “At the time we were told that was absolutely ridiculous and it would be nowhere near that much and now we see that nearly £6.5 million is being spent just on the staff transfer arrangements.

“There will be lots of other costs involved including with buildings, services and set-up costs.

“That is not to mention the cost to the most vulnerable people in this town who rely on that continuity of service and are going to see a 25 per cent turnover of staff in the company’s first year.”

She added: “We believe that the whole business model here is flawed and we think it will eventually fold or be forced to be bailed out by the council.

“When you see how much money they have in reserves, or the amount they receive from the Manchester Airport dividend, you realise this is all about political choices.”

While the council will not give specific breakdowns, it said most of the 400 staff from the adult services department have transferred to the new company.