Glasgow City Council must set date for new pay structure to end equal pay dispute

Glasgow City Council should set a new date for the resolution of its long-running equal pay issue to provide “certainty” to staff, auditors say.

Agreements were reached on pay claims with thousands of mainly female workers who have been paid less than men in equivalent roles. But a new pay and grading structure is required to end pay discrimination.

The council had hoped to implement the structure by the “latter part of 2024/25”. However, it revealed in September last year that it had been delayed as “complex” work continued.

A new date for the roll out of the structure has not been set. It is understood there is an expectation it will be introduced within this financial year (2025/26).

External auditors Ernst & Young found the council faces “significant” financial risks in the medium and longer term, including the roll-out of a new pay and grading scheme and backdated pay.

“Despite making progress, the implementation of the new pay and grading structure has been delayed, with a revised implementation date to be agreed,” a provisional annual audit report for 2023/24 states.

“Recognising the immense complexity of this project, the council must look to agree a revised date for implementation to provide certainty to the workforce and allow sufficient time for the operational implementation and financial impact to be effectively planned.”

Claims have been settled up to October 15, 2023 — the effective date for the introduction of the new pay and grading structure — but workers will receive backdated payments for the period between that date and the implementation of the structure.

A job evaluation process is being carried out to inform the development of the structure. It will determine the “relative importance of a number of different jobs”, the council previously said.

When the delay was revealed, officials reported it was due to challenges including “the priority to ensure robust job evaluation outcomes and meaningful consultation with trade unions”. They said there are a “number of critical milestones which are exceptionally challenging to forecast”.

The council settled over 15,000 claims with staff who had been paid unfairly in 2019, funded by a deal worth over £500m which saw 11 buildings, including the Riverside Museum and Emirates Arena, sold to an arms-length body then leased back.

That deal related to claims submitted before an agreed cut-off date of March 31, 2018. Another agreement, worth over £200m, for other claims, including after the cut off, was reached in November 2022.

The funding strategy involved the further sale and leaseback of six properties, including the city chambers, Kelvingrove Museum and the Gallery of Modern Art.

The audit report states the council made payments of £257.8m in 2023/24 in respect of equal pay settlements and “in order to prevent future liabilities, the council must implement a revised pay and grading structure”.

The annual rent payable by the council for all 17 sale and leaseback properties is now £32.1m plus annual inflation, the audit adds.

It continues: “Delivering an equal pay compliant pay and grading structure is a key strategic priority for the council. Significant and complex decisions will be required as the project progresses into this critical stage.

“While agreeing a revised date which can be adhered to is critically important, the council must also recognise the current risks that uncertainty in respect of timelines brings both strategically and operationally.”