Council plans to pay staff in shopping vouchers

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A local authority is planning to pay its staff in supermarket vouchers to save money, it said yesterday. Oxfordshire County Council has put forward the scheme to help save it hundreds of thousands of pounds each year in National Insurance contributions.

It will work by offering employees the chance to be paid a percentage of their salary in vouchers for stores and supermarkets such as Sainsbury's, Safeway and Marks & Spencer, or in child-care vouchers.

Many firms pay their staff in vouchers for Christmas bonuses, but this is believed to be the first time the idea would be used on such a large scale.

The council's chief executive, John Harwood, said: "This is a legitimate scheme whereby our employees are offered part of their remuneration in retail vouchers.

"The saving is potentially very significant. For example, if 25 per cent of the Council's 15,500 staff received 10 per cent of their pay in vouchers, the saving would be pounds 500,000 in the coming financial year."

The council would save money because National Insurance contributions do not have to be paid on the value of the vouchers.

Mr Harwood added: "We are now canvassing the level of potential interest, but there is no question of any member of staff being forced into being paid this way.

"It will simply be offered as an option, which has the benefit of saving money and helping us protect services."

Further savings would be made from the discount offered by retailers on the face value of the vouchers.

Questionnaires have been sent to staff to assess the level of interest before a decision is made. The scheme would only be available until 1 April 1999, when new legislation comes into force.