Pay claim cash crisis looming
GLASGOW City Council is facing “unprecedented” financial pressure as it faces a £1bn equal pay claim.
A £129m funding gap is adding to the pressure, a report has warned, raising concerns over the impact on public services.
The chairman of the Accounts Commission warned “it’s a serious concern.”
GLASGOW City Council is staring down the barrel of an ‘unprecedented’ financial crisis as it moves to settle a £1 billion equal pay claim, a report has warned.
An Accounts Commission Best Value report raised concerns the claims – which the council is currently in talks over settling with union representatives – will have serious implications for future budgets.
A huge bill is looming to compensate female workers for being paid less than men for carrying out equivalent jobs over several decades.
More than 6,000 claimants are owed between £500 million and £1 billion in payouts and the council has been unable to say so far how it will meet the cost.
The report read: “The council predicts a funding gap of £129.1 million over the next three years.
“In addition, the council is committed to resolving a substantial number of equal pay claims. This means that it faces a period of unprecedented financial pressure.”
The commission said these pressures may impact on the delivery of public services.
It recommended the council should consider the impact of resolving equal pay claims and include this within its financial plans. More widely it said the council should consider the potential impact on service delivery.
The report did, however, commend the council for steady progress since the last report in 2009 with improvements in several areas – such as schools, wellbeing of children and health.
Graham Sharp, chair of the Accounts Commission, said: “The equal pay claims issue has recently grabbed headlines. And our latest best value report is clear that the council should include the potential impact of any deal in its financial planning.
“It’s a serious concern for anyone with an interest in the city and the services provided to its citizens. But the scale of the challenge shouldn’t obscure the steady progress the council and its partners are making.
“There are encouraging signs on the health of Glaswegians, young and old. Healthy birthweights are up, for example, and life expectancy has increased.
“It’s important that momentum continues.”
Susan Aitken, leader of Glasgow City Council said: “At the heart of any Best Value audit is whether the council is delivering quality services that respond to the needs of individuals and communities and I’m pleased that steady progress in Glasgow has been recognised.
“The challenge of resolving equal pay is substantial and it would be unusual if it wasn’t a focus for the audit team. It’s a challenge we are committed to and we are making substantial progress.”