News story

Councils free to raise £250 million for underpaid workers

More councils are getting the green light to tackle historic pay inequalities today as the Coalition Government backs workplace equality, announced…

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

More councils are getting the green light to tackle historic pay inequalities today as the Coalition Government backs workplace equality, announced Local Government Minister Bob Neill.

Thousands of historically underpaid workers will benefit as 21 councils get the go-ahead to borrow against or sell assets up to £250 million this financial year to settle their equal pay commitments. This financial flexibility is important for councils needing to meet and manage one-off costs of equal pay compensation while protecting frontline services and keeping down council tax.

Thousands of local government employees - mostly women on low pay - are legally entitled to backdated pay following years of being paid less for doing equally valued jobs.

Bob Neill said:

For years thousands of hard working council staff, many of them women, were underpaid for doing the same work as their colleagues. This Coalition Government promised to fight for equal pay and work to end discrimination in the workplace. I’m very pleased today to give the green light for more councils to right historic pay wrongs by raising money on their assets.

By allowing councils to sell assets or borrow up to £250 million collectively, councils can deliver on equal pay compensation without affecting local services or council tax.

Councils are well on their way to addressing historic pay inequalities and managing the associated costs of settling compensation claims.

Notes to editors

  1. The Equalities Act (2010) which has replaced the Equal Pay Act (1970), sets out in legislation that all employees are entitled to be paid equally for ‘work of equal value’. Once historical gender pay inequalities are exposed, employees are legally entitled to claim up to six years of arrears of remuneration or damages.

  2. Since 2006 central government has given councils permission to raise over £1.8 billion for equal pay costs under a process known as capitalisation. Capitalisation directions give permission to local authorities to meet revenue costs out of capital resources, either through borrowing or capital receipts.

  3. Following Treasury agreement, the Department for Communities and Local Government is today issuing a total of £250 million in directions for equal pay back-pay to the following 21 authorities for 2010-11:

  • Bolton

  • Cumbria

  • Doncaster

  • Hertfordshire

  • Kingston upon Hull

  • Knowsley

  • Leeds

  • Liverpool

  • Newcastle

  • North Tyneside

  • Nottingham City

  • Portsmouth

  • Sefton

  • Sheffield

  • South Tyneside

  • Sunderland

  • Swindon

  • Tameside

  • Thurrock

  • Walsall

  • Wolverhampton


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Published 27 October 2010