Equal pay claims could dog city council for years to come
Finance chief admits nightmare that has cost over £1bn is not over yet
IT is the discrimination fiasco that has kept Birmingham City Council in a financial straitjacket for over a decade, costing it £1.25 billion but will the equal pay nightmare ever end?
The short answer is probably not. Clive Heaphy, the council’s finance and governance director, admitted there will always be a risk of new claims arising because ‘it only takes one manager’ acting out of turn to cause a damaging ripple effect.
The issue was initially concerned with men being paid more than women for jobs of a similar level.
Legal firms started filing claims against Birmingham in 2006/07, even though the relevant law – The Equal Pay Act – dates back to 1970 and was relatively under-utilised for decades.
Mr Heaphy, previously chief finance officer at Haringey Council, has only been in post a year but is clearly up to speed with Birmingham’s ball and chain.
He was keen to emphasise that the Second City is not alone in the issue, it just made the loudest headlines, and now others such as Glasgow are in the line of fire.
He said: “It’s not just a Birmingham problem, it’s a problem affecting both the public sector and private sector.
“We are the headline organisation, But the controversial proposed To put that into context the counpartly because we are the biggest changes to the service that promptcil needs to save £50 million in its council. The problem with being the ed the initial dispute were made, in budget in 2019/20 with early proposbiggest you are always going to be part, to reduce the risk of equal pay als including a 4.99 per cent rise in targeted. There are other organisaclaims. council tax, slashing funds for street tions who have suffered it on similar Publicly at least, other equal pay lighting and crossing patrols while scales. claims appear to have simmered increasing charges for bulky waste
“We know Tesco, for instance, down in the past 18 months collections and parking. have got equal pay claims which we although its occasional appearance Mr Heaphy admitted the council understand are up to £4 billion and I on private cabinet agendas is could never completely eliminate think the big supermarkets are all enough to raise suspicions. the risk of new claims. facing the same kind of challenges.” Mr Heaphy said: “We have worked He said: “Anybody has got poten
The council formally implemented with the unions here to try and get tial exposure; once there has been Single Status – a scheme to prevent an agreement and stem the flow of one exposure there’s potential other potential pitfalls in terms and condiclaims. exposures. tions between male and female “We are moving into that negotia“In an organisation as dispersed workers – in 2008, but it was not tion phase in trying as we are, with a workforce of 12,000, enough to stop thousands of sucto get an agreeit’s difficult to control everybody and cessful claims being made. In the ment now to make sure everyone is working beginning they came mainly from close out any towards what they should be doing. women, the likes of cooks, cleaners future claims. “It takes just one manager to and care workers who missed out on It doesn’t decide ‘I want to be generous to my bonuses handed out to traditionally help relastaff ’ and let them do something difmale-dominated roles such as bintions.” ferent – probably done in all innomen and street cleaners. To that cence, I’m not saying it would be a
But there have been a number of end, around deliberate act – but then suddenly landmark legal rulings along the way £150 million you might find you are in that situathat allowed men to make so-called has been set tion.
‘piggy-back claims’. aside in the “So closing it down in all honesty,
No-win no-fee solicitors have natc o u n c i l ’s which we are trying our best to make urally jumped on the bandwagon. accounts to sure we do, is a very difficult thing to All this comes as tens of millions deal with
do.“Youcanneverruleitout. of pounds are slashed from the known claims council’s public services each year in ‘in the sys“There is going to come a point a period when the authority has also tem’. where the unions and the no-win seen its annual government funding solicitors have got through with Birshrink by a nine-figure sum. mingham and will start to move on
Mr Heaphy said: “We’ve spent to other authorities like Glasgow. about £1.25 billion so far. It’s obvi“We just happened to be in the ously a huge amount of money for wrong place at the wrong time.” taxpayers. We’ve got an interest in making sure we treat everyone fairly. If people have got a valid claim, let’s make sure we treat that fairly, but also that we close it down so we can stop the haemorrhage of money from the council and services.
“We all want to settle this. None of us want to carry this on any longer than we need to.”
One ramification of equal pay is that it has contributed to the sell-off of huge cash-generating assets such as the NEC and Grand Central, much earlier than the council envisaged.
But the spectre of equal pay still looms large over the never-ending chaos dogging the bins service.
Industrial action has been sparked again in recent weeks over how the council ‘resolved’ the long-running bin strike in 2017.
There is going to come a point where the unions and the no-win solicitors have got through with Birmingham Council finance chief Clive Heaphy