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Local government minister, John Healey, has thrown a lifeline to cash-strapped councils facing huge back-pay bills for equal pay. Just a few weeks into his new job, Mr Healey has used his influence with his colleagues at his former department, the Treasury, to negotiate the deal to allow councils to treat back pay as capital expenditure. The deal will free up £500m cash to 46 local authorities to make one-off payments to their employees. Mr Healey said: ‘Local authorities have to settle their equal pay obligations but I recognise the position for many is tough. I want to do what I can to give them the financial flexibility they need to implement fair pay systems,' he told The MJ. ‘The onus to sort this out is now on local authorities.' Local Government Employers (LGE) has greeted the move as a ‘major step along the road of achieving equal pay'. LGE chair, Sir Steve Bullock, said it was a ‘clear indication that the Government shares our determination to resolve the issue and understands the size of the challenge involved'. However, he warned that tribunals brought by no-win, no-fee lawyers were still damaging for local authorities, and needed to be resolved. Public services union, Unison also described Mr Healey's announcement as a ‘significant breakthrough'. General secretary, Dave Prentis, said: ‘We have always maintained that collective bargaining, rather than lengthy court action, is the best way to ensure equal and fair pay for all.' Paul O'Brien, chief executive of APSE, said the cost of equal pay had left councils with no choice but to cut services. ‘This announcement now gives these councils the opportunity to resolve the issue while spreading the costs over time.'

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WHITEHALL

Healey's £500m back-pay bonanza

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