Asset sales to fund equal pay claims
0The Department of Communities and Local Government is looking at allowing councils to fund equal pay back claims with receipts from the sale of assets.
A paper was sent to councils yesterday proposing the amendment following concerns that the current system, which allows borrowing to pay for the claims, is raising public indebtedness.
Legislation from 2003 previously let the Department of Communities and Local Government issue capitalisation directions for equal pay back payments, which otherwise would have counted as revenue spending and been funded from revenue resources. Capitalisation directions meant that local authorities could meet costs by borrowing or using capital receipts. The new provisions let authorities use capital receipts from asset sales after April 1st, 2012.
A recent court judgment means that councils, many of whom thought they had discharged all their commitments around historical pay inequalities, might be 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.
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FURTHER INFO
Links to online material are as follows:
Local Authorities (Capital Finance and Accounting) (England) Regulations 2003
The earlier amendments relevant to equal pay were made by:
Statement by the Secretary of State
CONTACT POINT
Any comments should be sent by e-mail (with any attachments in MS Word), no later than 6 February 2013, to: sarah.blackman@communities.gsi.gov.uk
