New communities secretary Hazel Blears has definitively ruled out any extra cash to help councils solve the equal pay crisis threatening to overwhelm local government.
Speaking exclusively to Personnel Today, Blears said she recognised that financing equal pay was “difficult and costly” for councils, but it was not a new pressure for them to tackle.
“Local authorities are responsible for meeting their statutory requirements, and this includes obligations under the Equal Pay Act,” she said. “Local government should tackle equal pay proactively and in an affordable manner while protecting services. It is up to each local authority, as the employer, to manage their pressures affordably.”
Her stance is likely to anger trade unions, which have been demanding extra funding to help councils meet equal pay liabilities that could reach as much as £5bn in back pay and compensation.
Council employers were dismayed by the government’s decision not to make any extra cash available. As a result, many have appealed to central government for greater borrowing flexibility. But Blears said the capitalisation limit for borrowing against assets had been increased, and that individual council requests would be considered.
She added that the government was also examining proposals to protect deals signed by employers and unions from being unpicked by no-win, no-fee lawyers.
Blears also vowed to fight any legal action brought by local authorities over the creation of new unitary councils, which will see some councils scrapped – leading to job losses across the sector.
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