Women's equal pay bill rises to £25m as council settles claims

A COUNCIL could be forced to pay out another 1.8m this year to settle outstanding equal pay claims.

To date Hull Council has already paid 25m to thousands of women who claim they are unfairly being paid less than their male colleagues.

Nearly 900 employment tribunal cases are scheduled in May and Hull Council is looking at making out-of-court payments to reduce the cost. Another 200 cases could follow next year.

The figure of 1.8m comes in council leader Carl Minns’ budget proposals, which would see taxpayers paying no more on the council tax part of their bill this year – although police and fire services are likely to want increases.

The large-scale pursuit of equal pay claims was sparked at councils across the country after a change in case law made many historic pay practices covering bonus and “allowance protection” schemes likely to be discriminatory and difficult to defend at a tribunal.

Hull Council was so keen to avoid potentially costly tribunals that it even began offering settlements to women who had not even lodged a complaint, but who met “identified criteria for settlements”.

Coun Minns’ report states: “The council has been required to make a number of equal pay settlements in 2007/08 and 2008/09 to avoid more expensive legal proceedings.

“Further court rulings nationally expose the council to further risk and there remain a large number of cases scheduled for hearing at employment tribunal in 2010.

“Consideration is being given to making settlements to reduce the financial impact on the council.”

To speed up equal pay claims for women workers in local government, two years ago the Government allowed "significant amounts" of back pay to be treated as capital expenditure, allowing councils to spread the cost or fund it from receipts.

Hull, Leeds, Rotherham, Sheffield, Wakefield and York are among 46 local authorities in England who have faced the threat of legal action by trade unions on behalf of low-paid workers, mainly women, such as school dinner ladies and carers.

Even though it is nearly 40 years since equal pay legislation came into force in Britain, women working full-time still earn on average 17 per cent less per hour than men working full-time.

For ethnic minority women, the gap is even higher at 20 per cent. For women working part-time compared with men working full-time the gap is 36 per cent per hour – rising to 45 per cent in London.

To avoid any increases in the council tax element of the bill, savings of 3.2m will have to be made.

Coun Minns’ report sets out how this will be achieved – everything from reviewing terms and conditions and gradings in leisure services (saving 75,000) to commissioning highways work internally (saving 100,000) and streamlining business support systems (saving 350,000).

However, Labour group leader Steve Brady said the well-publicised drive to cut senior management costs was way off target. Instead of saving 2.5m in the first year, only 500,000 had been saved. “They have saved next to nothing in the first year”, he said. “They have probably spent more on consultants.”

And Coun Brady said the pay claim estimate could be “conservative.”

The Government has not formally set a “capping” limit for council tax increases in the coming financial year, but says it expects the “average” rise for local authorities nationally to be below three per cent.

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