CONTROVERSIAL plans to pay county council staff with supermarket vouchers have been scrapped.

Hard-up Oxfordshire County Council hoped to save up to £500,000 a year by giving employees ten per cent of their pay in the form of vouchers for Sainsbury's, Marks & Spencer, or Safeway, or as child-care vouchers.

But last month's plan provoked outrage from staff and trade union officials. The county council began a widespread consultation, and has now dropped the plan.

County treasurer Chris Gray said it was feared the publicity the idea attracted would alert the Government to the tax loophole the council planned to exploit, and made it likely ministers would move quickly to plug the gap.

He added: "That would negate the saving so we are not taking this further."

The idea behind the plan, dreamed up by staff in the treasurer's department, was that the council would not have to pay National Insurance contributions on the value of the vouchers paid.

And there would be more savings for staff if the stores offered a discount on the face value of the vouchers. It was estimated that if a quarter of the council's 15,500 staff got ten per cent of their pay in shopping vouchers it would save the council £500,000 a year.

News that the scheme was to be dropped was greeted with relief by members of staff.

One woman, who would not be named, told the Oxford Mail: "I wouldn't have signed up, because my mortgage lender doesn't take Sainsbury's vouchers.

"I think it's a bit of a shame that a team of people spent that time and money investigating that when they could have been doing something else."

Mark Fysh, Oxfordshire branch secretary for trade union Unison, which represents about one-third of the council's workforce, said of the idea: "It's outrageous - just like giving people wages, but saying they can only spend them at the company shop."

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