The government has stepped in to attempt to resolve the continuing chaos over the single status pay agreement.
But it has no solution to the crisis that has led to many workers – including many women – losing money over what was supposed to be a equal pay agreement.
Local authorities in England are to be allowed to borrow £500 million to help settle thousands of equal pay claims among their staff.
The move affects 46 local authorities across England which are facing the threat of legal action by trade unions on behalf of low paid, mainly women, workers.
'Capitalisation', as it is known, gives permission to local authorities to meet revenue costs out of capital resources, either through borrowing or capital receipts.
Local government minister John Healey said, 'Local authorities have to settle their equal pay obligations, but we recognise the position for many is tough, and I want to do what I can to give them the financial flexibility they need.'
Unison union leaders welcomed the decision as a 'significant breakthrough' in its long-running battle for pay equality. Unison general secretary Dave Prentis said, 'The announcement is a direct response to our call for funding for equal pay.'
However, it is unclear how this resolves the single status issue in local authorities.
Council bosses have tried to force through deals on the grounds that there was no more money.
It potentially opens up the prospect of more legal claims from workers in the third of councils who have already agreed deals without extra money – or indeed in a number of councils where the deal has gone through a series of renegotiations.
It seems strange that the government is determined to get councils to borrow money for equal pay and for house building. This is likely to lead to the prospect of councils arguing that they have to pursue even more cuts to services to fund the loan repayments.
The offer is not look likely to prevent wage cuts, and instead will lead to yet more confusion over equal pay.