Fife Council faces a potential £50m historic equal pay claim that could have a ‘significant impact’ on its finances.
The Scottish council has an uncommitted general fund balance (31 March) of £33m, but this does not take into account the possible £50m payout that would leave the council short by £23m.
Women working in the public sector have, historically, been paid less than their male counterparts for doing comparable jobs, so equal pay claims have been introduced to make up for this.
Last October, Fife Council reached a multi-million pound equal pay settlement with 1,400 low paid, predominantly female workers.
The fact that this was done out of court was welcomed by council leader David Ross, but he warned at the time that ‘this will make the development of our future budgets even more challenging.’
A £50m payout will add to the financial pressure faced by Scotland’s councils after John Swinney, the cabinet secretary for finance, announced surprisingly high funding cuts last month of £350m.
Cllr Ross, reacting to the reduction in the council grant, said that Fife would have to make £17m of savings next year, on top of the £21m worth of savings already planned and a total £91m of savings over the next three years, reports Fife Today.
A funding strategy has been formulated which includes additional borrowing, utilising the existing provision of £6.7m, and drawing on already committed funds such as £6.2m earmarked for wind power projects and £5m for Reforming Fife’s Public Services.
Cllr Ross has also written to Mr Swinney requesting consent to borrow to fund the back pay element of equal pay. Historically permission to borrow was available, but this finished 2 years ago and authorisation is now required from HM Treasury.
