Buck passed as source of equal pay leak is sought

Chief executive blamed council leader, says audit chairman

THE identity of the person behind a decision to go public over the enormous and “unvalidated” equal pay liability facing Birmingham City Council has been thrown into the spotlight following an extraordinary exchange.

It has emerged that chief executive Deborah Cadman and finance chief Fiona Greenway both deny being party to making the hugely significant announcement.

The council’s City Solicitor has since said that putting the predicted extent of the equal pay liability into the public domain “before it was externally validated” had “increased the risk of claims”.

Union leaders at the time said the announcement was akin to an admission of liability.

Ms Cadman, the council’s head of service, denied personally authorising or having knowledge of the plan to reveal publicly that the council faced potential equal pay liabilities of up to £760m.

The revelation, last June, sent shock waves through the city.

This week audit committee chairman Fred Grindrod (Lab) recounted how, during a private session of a previous meeting, he had asked the chief financial officer, Fiona Greenaway, how the figure of £650m to £760m came to be published in a council press release and who had authorised it.

He said: “The chief financial officer replied, stating that she had not known about the press release or been involved in the authorisation of it prior to its publication.

“The same question was put to the chief executive (Deborah Cadman) who replied in a similar manner, denying that she had authorised the press release announcing the figure.

“When I pressed further by asking who had then authorised the council communication team to put this information out, the chief executive stated that she had no knowledge of the release, had not approved it, and that it must have been the leader of the council to have done so.”

Cllr Grindrod then wrote to council leader Cllr Cotton, saying: “I’m incredibly concerned about this information, as it could be inferred from what the chief executive has said that you, as leader, acted to put the equal pay liability figure into the public domain without the involvement or advice of the chief executive or chief financial officer, thereby putting the council at increased risk.

“Please, can you explain why this decision was taken and your understanding of how this figure was put into the public domain?”

Cllr Grindrod then read out Cllr Cotton’s response, which stated: “I did not authorise the release of the figure related to equal pay unilaterally.

“It was recommended to me. This position was endorsed by the council’s statutory officers.”

The council’s statutory officers at the time were head of service Ms Cadman, S151 finance officer Ms Greenway and City Solicitor at the time Janie Berry.

News of the equal pay liability triggered a chain of events including an immediate spending freeze and the subsequent issuing of a Section 114 Notice, declaring the council’s de facto bankruptcy. The news of the equal pay liability was shared on June 28 last year, via a briefing to the media.

The same day, an email was circulated in the name of Ms Cadman to all councillors and staff, which stated: “Those of you who have worked at the council for some time will be aware that the council has already paid out a total of £1.1bn in relation to the settlement of equal pay claims over the last decade.

“Having now undertaken further analysis of our budget commitments, we have identified significant additional equal pay costs that will need to be provided for by the council.

“It is estimated that, as of 31 March 2023, the council’s current equal pay liability is in the region of £650m and £760m, with the ongoing liability forecast to be between £5 million to £14 million a month.

“Given the scale of strain on our budget, these additional costs cannot be met from existing resources, and we will need to re-prioritise our spending plans.”

There was no response from Ms Cadman’s office.