DCLG amends Capital Finance regs for equal pay costs
0The latest changes to the Local Authorities Capital Finance regulations have allowed for back-payments of equal pay costs to be funded from capital receipts. In essence this allows councils, some of whom are faced with large equal pay liabilities, to sell assets to make the payments.
Capital receipts received on or after April 1, 2012 may be used and councils can defer charging liabilities for these costs to revenue accounts until the date on which the payment must be paid, up until March 31, 2018.
The amendments have been made following a recent court judgment which left many councils who thought they had discharged all their commitments around historical pay inequalities liable for new equal pay claims, as cases may now be heard in the civil courts as well as employment tribunals. This extends the period in which claims may be lodged from six months to six years.
Birmingham City Council has to pay £757m in equal claims payments after 174 people won a ruling at the Supreme Court in October 2012. The claimants, mostly women, had not received the bonuses paid to their male counterparts.
The council is looking at selling assets including shares in NEC Group to help meet the liabilities.
Full details of the amendments are available here.
