HIE Severance Scheme Produces over £2m Annual Saving

28th March 2010

Highlands and Islands Enterprise (HIE) becomes a leaner organisation this month when 53 members of staff leave their posts through voluntary severance on March 31.

The move is calculated to produce a total of £2.02m of saving each year which will be reallocated to direct support for economic growth across the region.

Following the move, HIE, the Scottish Government's economic and community development agency for the Highlands and Islands, will retain 270 FTE staff working from 13 offices across the region stretching from Lerwick to Lochgilphead.

Chair of HIE William Roe explained: "Since 2007, HIE has been working to meet the ambitions of the Government Economic Strategy, focusing on helping to make the region more competitive, strengthening communities and supporting hundreds of local businesses across all parts of the Highlands and Islands.

"The Government's strategy identified that HIE should offer dedicated expertise to ambitious businesses and social enterprises, small or large, keen to expand their operations and markets. This month we are reducing our overall workforce but simultaneously looking to strengthen key areas by recruiting a number of posts to boost this support.

"We have a budget of over £83m to spend on this task over the forthcoming year and by creating savings in our internal operations and reducing our wage bill, we can devote a bigger share of that figure to supporting businesses and communities and investing in the infrastructure needed to help them succeed."

Staff have only been released where the post, as currently constituted, can be removed without impacting significantly on HIE's ability to fulfil its remit. The severance scheme will cost the agency £3.9m which will be recouped within two years.

Mr Roe thanked those leaving the organisation for the commitment and hard work they have contributed. He paid particular tribute to Director of Operations Douglas Yule, who has held a number of high profile roles within the agency. Mr Yule managed HIE's 150-strong area operations workforce and HIE's £45m property and construction portfolio.

Mr Yule leaves with an £18,000 severance payment and £19,500 in lieu of notice. In addition, because HIE is also obliged to make a contribution to its pension fund for staff who are effectively retiring through the severance scheme, HIE's pension fund will receive £263,000.

Mr Roe said: "Douglas has been a tireless and inspirational leader for HIE. His passion and ambition for the Highlands and Islands have created enduring benefits for the economy and he leaves a strong legacy of achievement. I am sure his abilities will continue to contribute to the success of the region in the future."

HIE will continue to keep its staffing requirements under review, and is keeping open an option to run a further voluntary severance scheme, on a smaller scale, in 2010-11. Were another scheme to go ahead, the organisation would require Scottish Government consent.