Equal pay will cost Liverpool city council £35m

Jun 19 2008 by David Bartlett, Liverpool Daily Post

LIVERPOOL City Council has asked to borrow £35m from the Government to settle equal pay claims with thousands of underpaid women workers, it emerged last night.

Around 7,000 staff, mainly women – dinner ladies, cleaners, and care staff – stand to get an average of £5,000.

Council officials have written to Government to request access to a special fund set up to help councils cope with claims, and will be told in the autumn how much the city can borrow.

Last night, union officials and the Labour opposition said the council should have been saving to settle the claims, as the problem had been known since 1997, when a nationwide equal pay agreement was brokered.

Labour leader Joe Anderson said the council’s delay in settling the claims may have ended up costing the authority more money.

But a council spokesman insisted borrowing the money would not affect council services, or mean an additional rise in council tax for residents next year.

The pay discrimination dates back to the 1970s and 1980s when bonuses were introduced as a way of dealing with low pay, according to the GMB union.

For example, bin men and male road sweepers on the same pay as dinner ladies have been getting bonuses of around 40%, boosting their pay in comparison to women who do not get extra money.

Many councils have dealt with the issue as part of a wider re-view, which councils must under-take, to ensure men and women are paid the same for work of equal value, called single status.

The single status agreement in 1997 between trade unions and local government employers, involves reclassifying jobs to ensure pay is fair, and in some cases staff will lose or gain pay.

The process was supposed to be completed in 10 years, giving councils time to plan for changes and the bill that would follow.

However, GMB said the unions in Liverpool had become fed up with waiting for the outcome of the review to conclude, as it was estimated to be concluded in 2010.

The union, which is handling 1,600 claims in Liverpool, said the council had agreed to make offers to staff in November or December. The issue mainly affects women, but also a small number of men.

A matrix will now be drawn up to determine how much each woman should get, based on variables like length of service.

Glyn Thornton, regional organiser for GMB union, said: “A lot of councils have already settled this by linking it to single status.

“But the deadline for single status seems to be getting put back and back – realistically, it will be 2010 before it is sorted.

“That was just too long to allow this historic equal pay issue to be unresolved – we are not allowing these claims to be delayed any further. I think the council had taken the view that they wanted to kick it into the long grass.

“We are pleased really that the council have accepted that there’s a potential problem there, I do regard it as a positive move even if it is belated in coming. It’s been a long process, and from the GMB’s point of view we have had our patience stretched to the limit.”

Last night, Labour leader Joe Anderson said: “The disappointing thing is that other councils have saved to prepare for it, but this council has not done.

“It shows again quite clearly the financial mismanagement of the city, which the Liberal Democrats have overseen.

“Other councils have saved money by paying these claims early.

“The fact is, if you borrow something you have to pay it back, and this is going to be a major problem for the city in future to balance its finances.”

A council spokesman said: “This issue affects all local authorities and the Government has set up a special scheme to assist councils in meeting claims arising from the introduction of new terms and conditions and equal pay.

“An application has been made and the amount authorised for councils will not be determined until the autumn.

“Account of this has been taken in the council’s financial planning and it will not affect services or the level of council tax.”

davidbartlett@dailypost.co.uk