'Government should pay costs of equality'

Apr 2 2007 By Kevin Rowan, The Journal

Despite being signed in 2004 by unions and local government employers, around one-third of all local authorities have still not implemented an agreement on equal pay and single status for their staff.

The TUC is calling on the Government to help councils meet the costs of equality.

Ministers can do this not just by providing direct funding, but by allowing councils to capitalise the costs and adjusting the tax and NI claw- backs on locally-agreed settlements.

Achieving equal pay has long been a principle ambition of trade unions.

The gender pay gap across the economy remains unacceptably high: 17% for full-time workers; nearly 40% if you're part-time.

Significant improvements have been won by unions since equal pay legislation came into force, through a combination of collective bargaining and legal action where necessary.

Indeed, unions have instigated all significant successful equal pay litigation. However, developments in the local authority sector have exposed two fundamental weaknesses which apply to both public and private sectors: significant additional funding is needed to end systemic unequal pay; and the legislation is no longer fit for purpose and needs a radical overhaul.

The main reason why many local authorities and other public bodies are reluctant to conduct reviews of their pay systems is because there is no extra money from central Government to fund any anomalies uncovered.

Combined with countervailing Government pressure to make annual efficiencies and reduce the local government pay bill, lack of funding for equal pay is the single most important barrier to achieving it.

The current situation in which local authorities, trade unions and the workforce find themselves is divisive, damaging to industrial relations and unfair to service users.

Local authority employers have told the Government that back-pay liabilities alone will cost them £3bn. The TUC believes the true figure could be nearer to £5bn.

Without additional funding this `cost-cutting' approach can divide the social partners, bring the cause of equal pay into disrepute and create conflicts with the other rights of those same workers.

Given Government's concern about the administrative burdens on employers and their desire to improve public services, there should be a shared interest in avoiding mass litigation arising in local authorities and elsewhere in the public sector and funding negotiated routes to secure equal pay.

In order to deal with back-pay claims, local authority employers would be greatly assisted by a relaxation of the stringent rules on capitalisation and the use of unallocated reserves, even though the sale of council assets or increased borrowing might not necessarily be the most desirable route to fund equal pay.

If the Government is serious about tackling equal pay, and I believe it is, it must lift some of the regulatory barriers that currently prevent local authorities and other parts of the public sector from properly funding legitimate equal pay settlements.

In other words, it needs to put its money where its mouth is.

Kevin Rowan is regional secretary of the Northern TUC