Minister issues guidance for councils on using assets to meet equal pay costs

The government has issued guidance for councils on how they can apply to borrow and sell against their assets to meet their equal pay commitments.

Equal pay directions give local authorities financial flexibility to settle their equal pay liabilities over an extended period of time. Without such arrangements in place, the costs would have to be met within the financial year.

In October 2010, 21 local authorities were given the green light by the government to borrow against or sell assets up to £250m. The capitalisation process has allowed councils to raise more than £1.89bn since 2006.

Councils now have until 16 September 2011 to apply.

Local Government Minister Bob Neill said: "We are again giving councils this financial flexibility to tackle the unfair pay inequalities of the past, which saw thousands of hard working council staff, mainly women underpaid for doing the same work as their colleagues.

"As councils work hard to manage their budgets in the current financial climate, it is all the more important they have this flexibility to settle their equal pay commitments while still protecting frontline services and keeping council tax low.”

The guidance can be found here.