Exclusive: Birmingham council spurned deal with unions that could have avoided bankruptcy notice

Campaigning for equal pay in Birmingham ( Picture: GMBStuart on Twitter)

Two GMB union sources have told Socialist Worker that they believed an agreement was imminent with Birmingham Labour’s council over processing equal pay claims last week. But Tory interventions and unelected council officials destroyed it.

This then triggered the council issuing a Section 114 notice—effectively a bankruptcy procedure— preventing all but essential spending.

Blowing up the deal is designed to unleash a class war attack on jobs, services and democracy.

A GMB source said, “There are people in the government and inside the council who preferred the council to crash and burn. Some think it will make Labour look bad and can be used to say ‘Birmingham is what you get if you vote Starmer’. Some council insiders liked it because they think it clears the way to make the unions surrender and to accept less than they ought to get on behalf of their members. But I can assure you that we are not going to back off.”

The council has blamed the massive amounts it owes to deliver equality and justice to thousands of predominantly women workers for its financial crisis.  These workers were denied the wages, conditions and special payments made available to some sections of predominantly male workers. They deserve every penny they are owed.

Birmingham Live website reported last weekend that the council was reviewing how to proceed with over £1 billion of potential equal pay claims. It said this amount “is mentioned in an exchange between council leader Cllr John Cotton and government minister Lee Rowley MP.”

Rowley told Cotton that he had to show that “decisions taken by the authority represent value for money and do not adversely impact on the level of support the government may need to provide.”

This implicit demand for a squeeze on any payouts panicked the council into dumping two pay equity scheme options it had intended to consider, and which the unions were ready to back.

Council officials backed this decision to tear up what unions had seen as a way forward.

The schemes which were under close consideration did not involve surrender by the council. Because they made important concessions, they would have disappointed and angered at least some of the workers affected.

But the schemes went too far for sections of the council, who then won their view among the rest.

Now a new blackmailing squeeze is on. Birmingham Live says there are now two ways of processing the equal pay claims. The first is to “carry out the evaluation project in-house and in partnership with an expert non-profit organisation, with the support of unions in principle”. The second is to wholly privatise it.

The council initially went with the first option. But, the GMB source told Socialist Worker, “They want more assurances from us—concessions—or the council will give up and the government will appoint commissioners.”

Commissioners are outside bureaucrats and business figures with immense powers to slash spending and sack workers without even the pretence of democracy.

The Tories have sent them into councils including Doncaster, Tower Hamlets, Rotherham, Northamptonshire, Liverpool, Slough, Sandwell and Thurrock.

Some Tories are hungry for this in Birmingham. An article on Conservative Home website on Thursday by Harry Phibbs, its local government editor, said, “Michael Gove, the levelling up secretary, should send in Commissioners to run the council without further delay. They should be given a clear brief to change the financial direction of the Authority, not just steady the ship”

Asked for comment on these matters, Birmingham council told Socialist Worker, “At this stage we don’t have anything further to add to our statement that was issued on Tuesday”.

Trade unions must not give in to the threats. And they must fight all the cuts and not betray the workers looking for pay justice. That will take defiance—and strikes.