Troubled Birmingham City Council is to work with unions to finally try and end discriminatory pay practices - as a new report reveals its new bill for equal pay liabilities could reach a staggering £1.1 billion. The sum - much higher than predicted just two months ago - was set out in an exchange between the city council and a Government minister. It was shared with councillors at a high level meeting this afternoon. (Friday)
Birmingham's business management committee, at an extraordinary meeting in the council's headquarters, agreed a new jobs and salaries evaluation scheme they hope will finally end the council's catastrophic record on equal pay. Thousands of current and former staff have so far been compensated over the last 13 years because of repeated failures to ensure men and women in comparable roles were being paid equally.
More than a billion pounds was paid out over a decade ago. But even so, discriminatory practices still persist, with the council facing hefty new bills as a result of thousands more claims.
In a report to the meeting, compiled by Chief Executive Deborah Cadman, Finance lead Fiona Greenway and City Solicitor Janie Berry, councillors were told the estimated potential equal pay liability that had been made public in late June gave a range of "between £650m and £760m" with an additional 'accrual rate' of £5m to £14m per month.
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But since then the council has received correspondence from one of the recognised trade unions advising of further potential equal pay claims being issued against it, says the report. The new figure now tops £1 billion.
The amount is mentioned in an exchange between council leader Cllr John Cotton and government minister Lee Rowley MP. Mr Rowley, Conservative MP for North East Derbyshire, and a minister for the Department of Levelling Up, Housing and Communities, wrote to the councillor: "Given the size of the unweighted litigation liability as communicated by your officers - £1.15 billion – it is prudent that I seek written assurances that decisions taken by the authority represent value for money and do not adversely impact on the level of support the Government may need to provide."
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As a result of his intervention, the council dropped two pay equity scheme options it intended to consider and was left with a choice of two - either carry out the evaluation project in-house and in partnership with an expert non-profit organisation, with the support of unions in principle, or outsource the project to an external organisation.
The committee decided to proceed with the first option, confirmed a council spokesperson. The council will now review pay and roles for every staff member using a nationally recognised pay evaluation tool called Gauge, working in partnership with West Midlands Employers, a not for profit organisation for public sector employers.
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The next step is for the unions and council to agree a set of principles that will guide the evaluation, with a deadline of next Monday September 11th for an agreement to be signed. The council warns that without this agreement, the whole scheme will 'not be practical to implement' and an alternative scheme will be pursued.
"A renewed Pay Equity System is critical to ending pay inequity and ensuring all staff are treated fairly," adds the report. The staff who now face evaluation are all those that work for the city council, Birmingham Children's Trust, Acivico - a wholly council owned service organisation - and maintained schools.
The report notes: "The council is committed to working with relevant stakeholders (including trade unions) to make this happen as soon as possible, so that the focus of the organisation can return to delivering “best in class” services, tackling inequality and making Birmingham a great place to live for all its citizens.
"For any of the options to be successful it is imperative that there is a positive collaboration between the trade unions and the council. Unstable trade union relationships would lengthen the progression of any methodology and potential industrial action would delay any implementation - and therefore add to the council’s accruing potential equal pay liability."
Subject to the unions agreeing to sign the principles document, the re-evaluation work is to start immediately. Separately, the council is also encouraging staff to consider applying to resign by mutual agreement as part of a cost cutting move.
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