Local government leaders responded to a bitter-sweet week by threatening to slash more jobs throughout the recession – despite receiving extra Whitehall support to settle historic pay liabilities. Within the space of 24 hours, town hall jubilation at being offered extra government support over backdated equal pay claims turned to despair, following ACAS's decision to award staff an extra 0.3% wage rise for 2008/09. Following a long-standing dispute between trade unions and employers, ACAS ruled that last year's pay increase should rise from the 2.45% offered by employers to 2.75%. Furious LGA leaders estimated the delayed increase would cost town halls £94m. They claimed authorities couldn't fund the revised deal because council tax increases and budgets had already been set for 2009/10, reserve coffers were low, and additional service costs were already being met during the recession. Margaret Eaton, LGA chairman, warned: ‘The additional pay award defies common sense. We are not prepared to pass this cost on to taxpayers, so it will be jobs that will have to go.' Local government minister, John Healey, countered: ‘I don't want to see councils simply cutting jobs as the easy option for cutting costs.' In a joint statement, Unison, Unite and the GMB trade unions said: ‘ACAS stated the award is "justified and affordable". ACAS also recognised local government workers were among the lowest paid in the public sector.' The annual pay row soured progress on equal pay announced 24 hours before ACAS's decision. Mr Healey revealed he would fund an extra round of capitalisation permissions – which allow councils to borrow, or sell assets, to fund historic equal pay claims – in 2009/10. ‘The responsibility is not new to councils – and in this tough economic climate, it's more important than ever that they work to make equal pay settlements,' he said. The CLG will shortly publish guidance to stop ‘no-win, no-fee' lawyers from taking a large chunk of equal pay settlements.
