Government launches fourth round of financial support to help councils meet equal pay obligations

The government this week launched a fourth round of financial support so that councils can meet their obligations to pay compensation over equal pay claims.

Capitalisation directions allow local authorities to meet revenue costs out of capital resources, whether through borrowing or by selling assets. So far the government has issued £1.64bn in capitalisation directions since 2006 to enable councils to meet their one-off equal pay obligations faster.

According to the Department for Communities and Local Government, it is estimated that more than half the total liability for equal pay compensation has now been paid.

The amount to be made available under the latest round will be revealed in the autumn, the DCLG said, “after taking into account the demand for capitalisation, the resource available to authorities and the wider fiscal position". The government has issued guidance on how councils can apply for capitalisation.

Local government minister Barbara Follett said: “Work of equal value deserves equal pay for every employee in any job in the country including local government. Thousands of council workers – women in particular – have lost out because of historically unfair pay arrangements, which in some cases persisted for years.

“Councils and unions are working hard to get pay to where it should be and this government will continue to do everything it can to see that this wrong is righted as fast as possible.”

Unison general secretary Dave Prentis said the move “should galvanise into action those councils that have still to bring in equal pay”.