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Government gives councils more financial flexibility on equal pay

The Government has moved to help councils speed up equal pay for women working in local government by allowing significant amounts of equal pay back pay to be treated as capital expenditure. This enables them to spread the cost or fund from receipts.

Communities and Local government announced today (Friday 28 September) the allocation of £500m equal pay capitalisation directions to 46 authorities in England giving them the financial flexibility to make one-off back-payments to thousands of employees - mostly women.

The Department has also responded swiftly to requests from local government by announcing decisions about the amounts allocated early in the financial year to make it easier for local authorities to manage their budgets.

Local Government Minister John Healey said:

"Local authorities have to settle their equal pay obligations but we recognise the position for many is tough and I want to do what I can to give them the financial flexibility they need to implement fair pay systems. However, this is not a new pressure and I would like to see some authorities doing more to tackle the issue in a pro-active and affordable manner.

"We have already amended the regulations on capital finance to improve the process of identifying and dealing with any equal pay liabilities. Today's allocations go a step further by allowing councils to treat significant amounts of back-pay costs in 2007/08 as capital. This gives them the flexibility they need to get on and work with unions representing their staff to ensure people get the benefit of equal pay to which they are entitled."

Notes to Editors

1. The Department issued £500m of capitalisation directions for equal pay back-pay in 2007-08 to 46 local authorities in England (listed below).

2. Capitalisation directions give permission to local authorities to meet revenue costs out of capital resources, either through borrowing or capital receipts.

3. The allocations were decided on a number of factors including the need for capitalisation, impact on the public finances and the scale of capitalisation relative to local authority budgets and expenditure.

4. In 2006-07 there were 35 equal pay capitalisation applications approved by Government totalling £160.5million. Full details can be found on the Departmental website at: www.local.communities.gov.uk/finance/capital/cap0607summ.pdf (external link).

5. The authorities to which the Department has issued capitalisation directions are:

• Basildon District Council
• Bedfordshire County Council
• Bexley Borough Council
• Birmingham City Council
• Blackburn with Darwen Borough Council
• Blackpool Borough Council
• Bolton District Council
• Brighton & Hove City Council
• Bury District Council
• Nottingham City Council
• Cumbria County Council
• Dudley District Council
• Greenwich Borough Council
• Haringey Borough Council
• Havering Borough Council
• Kingston upon Hull City Council
• Knowsley District Council
• Leeds City Council
• Lewisham Borough Council
• Luton Borough Council
• Middlesbrough Borough Council
• Newham Borough Council
• North Tyneside District Council
• Northamptonshire County Council
• Oldham District Council
• Peterborough City Council
• Plymouth City Council
• Portsmouth City Council
• Redcar & Cleveland Borough Council
• Rotherham District Council
• Salford City Council
• Sefton District Council
• Sheffield City Council
• South Tyneside District Council
• Stafford Borough Council
• Staffordshire County Council
• Stockton-on-Tees Borough Council
• Stoke on Trent City Council
• Trafford District Council
• Wakefield District Council
• Waltham Forest Borough Council
• Warrington Borough Council
• Wear Valley District Council
• Wirral District Council
• Wolverhampton City Council
• York City Council

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