A report has urged ministers to consider allowing councils to borrow against property they own, in order to rectify equal pay in local authorities, which could cost up to £3bn nationally, according to the Local Government Employers.
The LGE, established in April as part of the Local Government Association, is also pushing for legal reforms to ensure employers and unions can reach agreements on equal pay through a process of arbitration. Councils have until March to implement equal pay reviews of their workforce to bring the pay of women and men into line.
But the single-status reforms, guaranteeing equal pay for equal work, are likely to see thousands of female council employees win significant pay increases – possibly back-dated for six years and running into billions of pounds.
Jan Parkinson, managing director of LGE, explains in the report, Unblocking the route to equal pay settlements in local government, that ministers need to reconsider the capitalisation limit, which is currently set at £200M, so authorities can ensure equal pay is met without jeopardising services.
The cap is likely to hit Birmingham City Council, with the authority currently in the middle of talks to level out pay, which almost resulted in strikes earlier this year (Surveyor, 19 October).
The council declined to comment but unofficial estimates of it equal pay liability put the figure at £250M, following revelations highways workers in the city are being paid £4,500 a year just for being on the standby list for late-night jobs.
LGE analysis found the largest liabilities – which will have to be accounted for in 2007/08 – were in the West Midlands at £928M, the northwest at £740M, and Yorkshire & Humber at £371M.