EXTRA payments to staff at Southampton City Council will cost £5m this year.

City bosses will have to shell-out £2.5m in compensation pay backdated to April 2001. A further £2.5m will be paid as the result of a pay deal negotiated between city chiefs and unions.

The new pay measures have come about as a result of the council adopting the "Single Status Agreement" - a national pay review structure agreed between unions and local authorities.

The agreement was supposed to have been implemented in 2001 but was delayed while the council was trying out a new job evaluation scheme - and ongoing negotiations with unions.

The figures were revealed by the former finance boss of Southampton City Council Councillor Peter Marsh-Jenks at a meeting of the council's employment panel yesterday.

In a separate move, members of the panel voted unanimously to scrap so called "golden hellos" and "golden handcuff" deals which are meant to help the council recruit hard-to-find employees.

The move was proposed by Cllr Marsh-Jenks, who questioned the need for the incentives if the

council was agreeing revised pay deals for its staff. He said: "I have always had a problem with these schemes. They are a mechanism for delivering thousands of pounds into the hands of white, middle class men."

Under the new package of measures, the number of job grades at the council has been slashed from around 60 to just 13.

So called "white collar" workers and manual staff will now be paid in line with the nationally agreed limits. Pay for lower paid, mostly female, workers is also due to be boosted.

The new pay structure covers about 6,500 council staff and was meant to be introduced in April 2001. But delays in implementing the deal mean that hundreds of workers will share in a compensation package of £2.5m which will make up for shortfalls in their earnings over the past two years. The other £2.5m will be given to workers who benefit from the new package of measures designed to boost pay for lower paid staff.

Councillor Dennis Harryman praised the work that had gone into producing the new deal. However, he queried why unions were being given compensation - in spite of the fact that workers were on strike earlier this year.