Equal pay: Councils allowed to use assets to fund back pay

Local government minister John Healey has told councils that they will again be allowed to borrow money or sell assets in order to implement equal pay, in a move welcomed by union leaders.

Many local authorities are still struggling to fund back pay for thousands of, mainly female, staff, as required by the 1997 single status agreement, despite an original deadline of April 2007 to implement equal pay settlements.

Over the past three years a number of councils have been allowed to borrow against or sell assets in order to speed up delivery of the payments.

Since 2006, more than £1bn has been raised by the ‘capitalisation’ of council property, with 34 authorities borrowing £455m last September alone.

Healey said a further round of capitalisation would be permitted in order to help fund equal pay costs in 2009-10.

No payments for solicitors

He warned that he would not allow the money to be used to fund direct payments to solicitors involved in equal pay legal battles.

Unison general secretary Dave Prentis said: “This is a great step forward for thousands of women working in local councils who have suffered pay injustice for years.

“We are very pleased that the local government minister has recognised the role of the unions in bringing about equal pay and that he has closed the door to the no-win, no-fee solicitors making money out of this process.”

Details on how councils can apply for the next round of capitalisation will be released shortly by the Department of Communities and Local Government. A decision on how much money councils will be allowed to raise will be made by ministers in October.

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