Healey announces support for Councils to deliver equal pay

COMMUNITIES AND LOCAL GOVERNMENT News Release (229) issued by COI News Distribution Service. 26 September 2008

Local Government Minister John Healey has today announced action to give councils the financial flexibility they need to speed up meeting their long-term commitments to achieving equal pay for staff.

Mr Healey gave the green light to 34 councils to raise £455m to meet equal pay liabilities, either by borrowing against or selling assets - known as capitalisation. This will enable them to make one-off back-payments to thousands of employees - mostly women on low pay.

The Government has acted to help councils make equal pay settlements, approving over £1.1bn of capitalisation over a three-year period.

This has been widely welcomed by local government and trades unions as practical support that enabled councils to meet their commitments as employers. Evidence suggests progress is speeding up as a result - the Local Government Employers report that in July 2007 only around two in five of authorities had either implemented or completed their local pay reviews, but by the end of July this year it had reached three in five.

Local Government Minister John Healey said:

"Work of equal value deserves equal pay. Local government workers have the legal right to fair pay like anyone else, but some councils have let unequal pay persist for decades.

"I'm determined to see councils settle their equal pay obligations. Local government workers should get the equal pay to which they are entitled.

"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.

"I know this can mean some tough financial decisions. So to support this, I am allowing 34 councils to raise £455m either by borrowing against or selling assets, giving them the financial flexibility they need to make this happen.

"I want to see councils go further and faster, working closely with the trades unions, to see fair pay for all staff."

UNISON General Secretary Dave Prentis said:

"With a million women in membership, funding equal pay is a huge issue for UNISON. That's why today's announcement is very welcome news, and a huge boost for those women in the local councils affected, who will receive some pay justice at last.

"It builds significantly on previous capitalisation directions and shows that the Government is serious about delivering equality and fairness throughout the local government workforce."

Chair of the Local Government Employers, Sir Steve Bullock, said:

"Councils want equal pay within their workforce and are working hard to achieve it. This announcement is a major step along the road of achieving equal pay for the local government workforce.

"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 and is a clear indication that Government shares our determination to resolve the issue and understands the size of the challenge involved. "

Notes to Editors
1. The Department issued £455m of capitalisation directions for equal pay back-pay in 2008-09 to 34 local authorities in England (listed below).

2. Capitalisation directions give permission to local authorities to meet revenue costs out of capital resources, either through borrowing or capital receipts.

3. The allocations were decided on a number of factors including the need for capitalisation, impact on the public finances and the scale of capitalisation relative to local authority budgets and expenditure.

4. In 2007-08 there were 46 equal pay capitalisation applications approved by Government totaling £500 million. More details can be found at: http://www.communities.gov.uk/news/corporate/490459

5. The Authorities to which the department has issued directions are:
Basildon
Bath & North East Somerset
Birmingham
Blackpool
Bolton
Bradford
Brent
Brighton & Hove
Bromley
Bury
Coventry
Croydon
Cumbria
Dudley
Ealing
Erewash
Hampshire
Harrow
Havering
Kingston upon Hull
Knowsley
Lancaster
Leeds
Liverpool
Merton
Middlesbrough
North Tyneside
Northampton
Northamptonshire
Portsmouth
Redcar & Cleveland
Salford
Sandwell
South Tyneside
Staffordshire
Torbay UA
Wakefield
Wear Valley
Wolverhampton
York UA

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