Glasgow's Equal Pay Bill

The Sunday Herald reports on what Glasgow City Council is up to behind the scenes to meet the cost of its equal pay bill.

What's not clear though is the amount Glasgow is seeking to raise - which is the key to resolving this long-running dispute.

So let's see what happens in the New Year because, as things stand, the Council has not come close to meeting the demand for a just settlement based on the pay and pensions the Claimants have lost after working for 12 years under the 'unfit for purpose' WPBR pay scheme.

 

https://www.heraldscotland.com/news/17316635.revealed-glasgow-councils-plan-to-pay-its-500m-equal-pay-bill/?

Revealed: Glasgow council's plan to meet its £500m equal pay bill

By Paul Hutcheon - The Sunday Herald

The City Chambers

GLASGOW city council is considering paying off part of its huge equal pay bill by mortgaging some of the city’s showpiece sports and culture facilities, it can be revealed.

Under the plan, a local authority arms-length body would take control of high value assets and use them to secure a loan to help meet a settlement that could exceed half a billion pounds.

However, a Tory MSP has expressed concerns about using marquee properties such as the Emirates Arena, the Royal Concert Hall and the SEC Centre in this way.

Adam Tomkins said: “Glasgow residents will be concerned that the city’s public assets are being mortgaged to pay for this. The contracts setting up these property transfers will need to be open to the fullest transparent scrutiny to ensure Glaswegians are getting value for money. There can be no hiding behind spurious claims of ‘commercial confidentiality'.”

The equal pay row affects around 12,000 low paid workers, mainly women, who have pursued claims against the council for over a decade.

In 2006, under a Labour administration, a job evaluation scheme was introduced with the objective of making sure men and women received equal pay.

Part of the scheme included a three-year payment protection for male workers who lost bonuses, an arrangement judged to be discriminatory.

Successive Labour administrations defended the council’s position through years of legal battles, but the SNP group on the council, which swept to power in 2017, said that "negotiation" would solve the dispute.

Despite Nationalist council leader Susan Aitken rejecting her predecessors’ strategy of going through the courts, trade unions have been frustrated at what they regard as a lack of progress towards a settlement.

Strike action took place earlier this year after the GMB, Unison and Unite unions, as well as the legal campaign group Action for Equality, complained that months of talks had made no progress.

Although the total value of the sum owed to serving and former staff has not been worked out, sources believe it will be in the region of £500m.

The key issue is how the council will pay a bill that could amount to a large proportion of its annual income.

Aitken has previously dismissed suggestions of a bailout by the Scottish Government, and her administration is instead looking at a solution involving arms-length organisation City Property Glasgow (Investments) LLP.

Set up by sister company City Property (Glasgow) LLP, the firm purchased council commercial assets for £120m in 2010. Both entities are ultimately owned by the local authority.

The Investments LLP borrowed the sum from a lender, Barclays PLC, after which the £120m was given to the council. Rental income generated from the properties is used to repay the debt.

A source told this newspaper that a similar arrangement is the favoured option for meeting part of the equal pay bill.

If agreed, ownership of a number of high-end properties would be transferred to the arms-length firm.

The company would seek to obtain a loan from commercial lenders based on the value of the signature buildings.

An insider said the council’s imposing City Chambers, based in George Square, would not be part of any deal.

Assets including the Kelvingrove Art Gallery and Museum, as well as the Mitchell Library, are also not on the table. The portfolio is instead likely to include sport and cultural properties which generate sizeable revenues.

One contender is the Commonwealth Arena and Sir Chris Hoy Velodrome, otherwise known as the Emirates Arena. A facility located in Dalmarnock, it was built for the 2014 Commonwealth Games and is based across from Celtic Park. It has a rateable value of nearly £4m.

The Scotstoun Stadium, an athletic and rugby union facility in the city’s west end, and the Tollcross International Swimming Centre, which hosted events at the Commonwealth Games, may also be included.

Big-name cultural facilities could also be used to secure finance for the equal pay settlement. SEC Ltd, which is majority-owned by the council, has the SSE Hydro, the Armadillo and a conference centre. Elements of the portfolio could form part of any negotiations.

The Royal Concert Hall, a major music and arts venue in the city centre, could also help secure a sizeable loan, as could the city’s award-winning Riverside Museum. Glasgow Club Bellahouston is also in the same category.

In practice, any loan would mean the properties being used as collateral against the debt. The lender would only have a claim on an asset if the council defaulted on the repayments.

However, this funding route would only be part of the strategy to pay the equal wages bill, and it may go hand-in-hand with the LLP trying to refinance its existing loan arrangement.

The plan confirms Aitken’s previous statements that the SNP Government will not step in: “I spoke to the Finance Secretary [Derek Mackay] if he thought it would be possible for the Scottish Government to meet the sum, not in any great expectation that he would. And he confirmed that would not be possible.”

Tomkins, a Glasgow MSP, added: “That so many gyms and leisure facilities are to be mortgaged in this way is worrying, given the urgent need to address and to keep addressing public health in Glasgow. Still we suffer from the worst health inequalities in Europe—how will using leisure centres as capital help on that score?

“Glasgow council taxpayers will be dismayed that there would appear to be no financial help from the Scottish Government. SNP council leader Susan Aitken has got a dismal return from Nicola Sturgeon for the last 18 months she has spent sucking up to the First Minister.

“In Edinburgh, SNP council leader Adam McVey fights for what he thinks are his city’s best interests even when challenging Scottish Government policy. Susan Aitken, by contrast, has shown she’s the SNP’s person in Glasgow, not Glasgow’s champion in the backrooms of the SNP."

A council spokesman said: “It is no secret that the wider financial strategy for meeting the council’s equal pay obligations is likely to include an element of borrowing and also more effective use of the city’s assets – and the leader of the council has acknowledged this in recent months.

“Work is ongoing, in parallel with negotiations on the settlement, and we expect to bring forward detailed proposals in the early part of the New Year.”

Labour declined to comment.