POLITICS: Equal Pay Law May Cost Councils Pounds 1bn
Byline: By Paul Dale Chief Reporter
The cost of implementing a Government equal pay directive could land West Midlands councils with a pounds 1billion bill.
Local authority leaders are warning of sharp council tax increases and cuts in services unless they are given permission to meet the additional costs through borrowing.
Single Status reforms, guaranteeing equal pay for equal work, are likely to see thousands of female council employees win significant pay rises backdated for six years.
But councils across the country are facing a "totally unmanageable burden" in adopting equal pay for women staff, according to the Local Government Employers organisation.
Birmingham City Council and other West Midlands local authorities have already been hit by legal action brought by trade unions on behalf of women workers who say the backpay they have been offered is insufficient.
Unofficial estimates of Birmingham's equal pay liability put the figure at pounds 250million. The council is refusing to comment.
An LGE report urges the Government to give permission to borrow cash to raise the money needed to meet their liabilities by a deadline of next March.
LGE warned that services will be jeopardised if the Treasury does not lift a pounds 200million national ceiling on "capitalisation" - borrowing money against the security of council-owned assets.
Managing director Jan Parkinson suggested the ceiling may have been imposed because of the impact wides-cale council borrowing would have on the Treasury's ability to meet Chancellor Gordon Brown's "golden rule" that Britain's books will balance over the economic cycle. …