Glasgow council on brink of forking out £1 billion in pay row

Glasgow Council may pay 'a billion pounds' to settle pay says Smith

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The SNP-run council could face a budget shortfall of nearly £120 million for the 2023/2024 financial year. The council’s financial forecast, published on Wednesday, revealed that it is predicting a deficit of £119.4 million. But General Secretary of the GMB Union Gary Smith warned it could be even higher due to the equal pay row.

Speaking to LBC, Mr Smith said: “We’re in the midst of a long battle over equal pay.

“It will end up costing the council a billion pounds to settle equal pay claims in Glasgow, those women were cheated out of money for years.

“In Birmingham we’ve got over a thousand equal pay claims.

“A thousand people have joined the union.”

He added: “What the employers do is they try to turn a blind eye to bad practice.

“We will have big problems with equal pay in the health service, we will see that coming in the years ahead.

“But you go to any council and if there are jobs which are predominantly done by women, those women will be on inferior contracts and they won’t be getting the true value of their labour.

“This is a masisve problem.”

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Pressures such as increasing utility costs and revenue consequences of capital investment are expected to cause a shortfall of £26.7 million.

Included in this figure is the rental cost of operational properties that have been included in recent sale and leaseback agreements conducted by Glasgow City Council in order to settle equal pay claims.

The council announced in September that two art galleries and Glasgow City Chambers will be among buildings to be sold and then leased back to fund the claims after it agreed to pay out at least £500 million in 2019.

The forecast said there are no assumed increases in council tax – as it will be a decision taken at the council’s budget meeting – or in spending.

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The local authority said that as a result of various measures undertaken to save money previously, the ability to identify opportunities for savings has become “increasingly difficult”.

It warned that the scale of savings required will be “considerably higher than have been faced in previous years”.

Inflation is expected to have the biggest impact on the council’s finances, making up £87.2 million of the predicted loss, with pay inflation set to form the largest part of this figure at an estimated £80.1 million.

The report, prepared by executive director of finance Martin Booth, says there is a “degree of uncertainty over a number of the key elements”, particularly in the “current climate of inflationary pressures and public sector funding challenges”.

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