Y Pwyllgor Iechyd, Lles a Llywodraeth Leol
Health, Wellbeing and Local Government Committee

HWLG(3)-01-09

Dr Brian Gibbons AM
Minister for Social Justice and Local Government
22 January 2009

Dear Brian

Implementation of Equal Pay Arrangements in Local Government

Introduction

Thank you for attending the Committee’s meeting on 15 January and for answering Members’ questions on the implementation of equal pay arrangements in local government in Wales.  As you know, the Committee also took evidence from the Welsh Local Government Association and from UNISON Cymru Wales.

My purpose in writing is to summarise some of the main points made in evidence and to ask you to respond where appropriate.  We have also agreed four specific initial recommendations that we would like you to consider.  

We recognise that this is a complex area in involving detailed pay evaluations and negotiations where there is a need to balance the legal duty to have fair and equal pay arrangements with best value for taxpayers.  The complex and shifting legal background continues to add to the complexities involved.  

Nevertheless, almost 40 years on from the introduction of the first equal pay legislation, it is of deep concern to us that a very significant part of the public sector in Wales has still not fully implemented equal pay systems and that many staff have still not received the compensation to which they are entitled for past discrimination.  I am sure you share these concerns.

Legal Powers of Welsh Ministers

You promised to let us have further information on whether the Welsh Ministers have any legal powers that could be used to compel local authorities to proceed more quickly.  While we appreciate the reasons why you might be reluctant use any such powers it would still be helpful to us to have a clear statement of your powers and duties in this area.  

UNISON Cymru Wales in its evidence referred to Section 77 of the Government of Wales Act 2006.  It would be helpful to have your assessment of the extent to which these provisions might apply to this issue.

You also referred in your evidence to the fact that the Assembly Government has asked for additional powers, through the Equality Bill that the UK Government intends to introduce.  It would be helpful to know what sort of powers you believe might be delivered through that Bill that would put you in a better position to help improve the position on equal pay in local government in Wales.

Financial Support to Local Authorities

Resources

In your evidence, you referred to the increase of 1.5% per annum for the non-teaching pay bill that the Assembly Government has built into the Revenue Support Grant (RSG) baseline for each of the financial years 2005-06 to 2007-08.  We have been told separately by the WLGA that the increase in 2006-07 was in fact 1.24%.  Can you confirm that the increase in 2007-08 was commensurately higher in order to provide an overall uplift of 4.5%.  

Tracking of Spending

We were somewhat bemused to find that the Government appears to have little or no information on how much of the additional money built in to the RSG has actually been spent on settling equal pay claims or has been committed to reserves for this purpose.  We believe that, at the least, we should be able to track how much money has been given to each local authority in Wales and how much if any of it they have spent on equal pay.  The WLGA in their evidence suggested that information on this will be available to local authority auditors.  In the light of this:

We recommend that the Assembly Government asks the Wales Audit Office to establish urgently:

the additional amount in cash terms that each local authority has received as a result of the 4.5% increase in the pay bill;

how much money each authority has spent on implementing equal pay systems;

how much money each authority has committed to their reserves in anticipation of implementing equal pay systems in future.

We recognise that some of this information, if published, could compromise individual authorities’ negotiating position.  We would be content for information to be provided in a way that protects these positions.  

Hypothecation of Resources

We are not generally in favour of extensive hypothecation of funding to local authorities as local councils are often best placed to reflect particular local needs and circumstances.  

However, in this case, we are not as yet convinced that these factors should continue to prevail over the need to implement very clear legal duties in respect of such a key aspect of equality legislation.  It was clear from your remarks, that you were not convinced that hypothecation is the way forward.  However, if there is evidence that local authorities are dragging their feet we believe that consideration should be given to withdrawing funding from those authorities.

We recommend that the Assembly Government consider setting a date beyond which Assembly Government funding will no longer be available to local authorities that have not concluded equal pay agreements or can demonstrate measurable progress towards doing so.

Outstanding Liabilities

We heard in evidence that there are some authorities that do not consider they have any liability for back pay and whose pay systems are already based on equal pay principles.  We are somewhat sceptical that there will be any local authorities that do not have some liability or that do not need to improve their pay structures in some way.  However, if there are such authorities it is clearly a waste of public money to continue to provide them with funding for which they have no identifiable need.  

We recommend that, where an authority has self identified as having no liability for back pay and no need to change pay systems that, it should no longer receive any additional funding from the Assembly Government.

Future Action

All of those from whom we took evidence, including you, felt that there had originally been considerable goodwill from all the parties involved (the Assembly Government, local authorities and trades unions) to resolve this issue quickly.  However, UNISON in particular felt that the initial impetus on this issue had been lost, that there was a currently a lack of focus and that the Assembly Government needed to take a more proactive stance.   We agree that there is a need to refocus attention on this issue and to emphasise that public funding is dependent on evidence of progress, or the real prospect of progress, being made. While we are not necessarily convinced that this will be a panacea:

We recommend that the Minister for Social Justice and Local Government convenes an urgent meeting of all the main parties involved with the aim of refocusing attention on this issue and of speeding up progress on the implementation of equal pay arrangements in local government in Wales.

Conclusion

We are not wholly convinced that a Plenary Debate on the matter is as yet required.  We have, therefore, decided not to report formally to the Assembly on this issue at this time.  However, we may decide to do so in the light of your response to this letter and our recommendations.  The recommendations are small in number and do not, on the face of it, require complex responses, at least on the principles involved.  We would, therefore, be grateful for an early response, if possible before the end of the half term recess.

I am copying this to Steve Thomas in the WLGA and Paul Elliott in UNISON. A copy will also be published on our web pages as will your response in due course.

Yours sincerely

Jonathan Morgan

Chair