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Equal pay crisis continues to mount in local councils
Local authorities are facing a “totally unmanageable burden” with equal pay bills set to hit £3 billion, according to a new report by the Local Government Employers.
The 2004 NJC agreement set a timetable for all local authorities to fully implement equal pay reviews to bring the pay of women and men into line by 31 March 2007. The deal envisaged local authorities negotiating with unions on the basis of comprehensive proposals to introduce new “equality-proofed” pay structures.
But severe problems have arisen with financing the agreement as back pay and salary protection costs have spiralled, coupled with the need for employers and trade unions to defend themselves against legal challenge.
Figures gathered by the Local Government Employers put the “back pay” liability at £3 billion, with one council's equal pay liability standing at £250m alone.
So far, two-thirds of authorities have still not implemented new pay structures.
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Capitalisation
The report, "Unblocking the Route to Equal Pay Settlements in Local Government", urges Ministers to reconsider the capitalisation limit, which is currently set at around £200million, so that authorities can ensure that equal pay is met without jeopardising services.
"This is not a begging bowl to central government. This is asking for the flexibility for councils to be allowed to access their own resources," said Jan Parkinson, managing director of Local Government Employers.
"Government has issued a letter stating that bids to capitalise back pay settlements will be subject to an overall cap of approximately £200m. This will affect the ability of some authorities to fund back pay costs, especially as the figure covers all items permissible for capitalisation.”
Legal reforms
As well as needing to find ways to fund equal pay, the report says authorities need to be confident that they can strike deals with unions without the risk that settlements will be overturned by mass equal pay claims at employment tribunals. It urges Ministers to consider legal reforms that would ensure employers and unions can reach agreements on equal pay via a process of arbitration.
“One way of doing this is to have third party arbitration to ensure that the process is fair to all concerned,” said Parkinson.
Want to know more?
Title: Unblocking the Route to Equal Pay Settlements in Local Government, Local Government Employers, November 2006.
Availability: To download the 15-page report in PDF format visit www.lge.gov.uk/lge/core/page.do?pageId=60283
Local Government Employers (LGE) was created by the Local Government Association (LGA) in April 2006. It works with local authorities, regional employers and other bodies to “lead and create solutions on pay, pensions and the employment contract, to ensure the provision of excellent and affordable local services”. To find out more visit www.lge.gov.uk