Employers are not to blame for the crisis that has saddled many local councils with huge equal pay bills, the head of the Local Government Employers (LGE) body has insisted.
A report last week warned that moves to bring women’s pay into line with men’s had placed a “totally unmanageable burden” on councils.
The LGE estimates that as much as £5bn could be needed to cover back-pay liability.
The most significant liabilities were found to be in the West Midlands (£928m), the North West (£740m) and Yorkshire & Humber (£371m), the LGE report showed. Local councils could potentially be forced into bankruptcy and slashing services unless they receive help.
But LGE managing director Jan Parkinson rejected claims that the problem was of the employers’ own making for failing to deal with equal pay earlier.
Two-thirds of councils have still not implemented new pay structures ahead of the March 2007 deadline.
“The fact of the matter is that [equal pay] is the most complex issue for employers to deal with. There has not been a reluctance to tackle the problem,” she told Personnel Today.
The LGE has called on the government to allow councils to borrow on their assets – known as capitalisation – to raise more cash. The government has said bids to capitalise back-pay settle-ments will be subject to an overall cap of £200m.
Parkinson insisted the request was not “a begging bowl” to central government.
“With one council’s equal pay liability standing at £250m, this [amount] is clearly insufficient. If councils cannot afford these liabilities, what do they do? Are we going to allow councils to go bankrupt?” Parkinson asked.
Early indications from the government are not encouraging for councils. A spokesman for the Department for Local Government and Communities said: “It is for local government to ensure that it implements pay reviews which remove discriminatory aspects of its pay structures, and tackle equal pay proactively and in an affordable manner.”
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