03 October 2008
Local government minister John Healey has approved £455m of capitalisation to help councils meet their equal pay liabilities.
Town halls have been struggling to handle the costs of equal pay claims and of overhauling their pay structures following the 1997 Single Status Agreement between unions and employers. This was designed to give women and men equal pay for work of equal value.
Healey's announcement will allow 34 councils to raise £455m, by borrowing against or selling capital assets. It brings the total capitalisation approved to meet local government equal pay obligations to more than £1.1bn over the past three years.
But by July this year, 40% of councils had still not completed implementation of equal pay reviews.
Healey said: 'Good progress has been made over the past year. But this is not a new obligation on employers and I now want to see even greater progress made, and the momentum of the past year maintained.'
The greater financial flexibility would help town halls make the 'tough financial decisions' needed to implement equal pay, he added.
Sir Steve Bullock, chair of Local Government Employers, said: 'Providing a fair settlement on equal pay remains an urgent issue for local councils, who must act in the best interests of local tax payers as well as all staff.'
The capitalisation permissions were 'a clear indication that government shares our determination to resolve the issue and understands the size of the challenge involved', Bullock said.
But he added that equal pay challenges being brought by 'no-win, no-fee' lawyers were causing 'chaos' and damaging planning for local services.
Unison general secretary Dave Prentis welcomed the news as 'a huge boost for those women in the local councils affected'.
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