Sunderland nursery nurse Gina Smith is losing 240 a month under the single status agreement aimed at equalising the pay and conditions of local authority employees - a substantial chunk out of an insubstantial salary.
While some categories of local authority employee, including school support staff such as Ms Smith, are enjoying mixed fortunes under the single status agreement, other groups - cook supervisors, for example - are winning out.
In some areas, school support staff have faced swingeing cuts and been put on 37-hour per week term-time only contracts, while in others, they have been upgraded to pupil mentors and other better-paid roles. As for cook supervisors, Unison national officer Christine Lewis says she would be 'incredibly surprised' if they had not all gained from the job evaluation and regrading process 'because they have been traditionally undervalued'.
Ms Smith feels the solution to equalisation of pay lies with a national agreement and has taken her message to the top with a petition on the Downing Street website demanding a national pay scale for nursery nurses and teaching assistants. A DfES report into the setting up of such a structure, originally due for publication last year, has yet to see the light of day.
Ten years after the Government initiated the single status agreement, those councils that have implemented it - a minority - are incurring massive costs, stemming from higher wage bills and escalating claims for back pay.
Meeting the requirements of these single status agreements could mean a crippling 5bn burden, with councils forced to cut jobs, sell off assets or raise council tax.
Pay liabilities
In a doom-laden report on the crisis, Unblocking the route to equal pay in local government, the Local Government Employers (LGE) body warns, 'The financial issues are significant. The pay bill could see a permanent increase of up to 5 per cent to introduce new equality-proofed pay structures.'
It adds that other factors will have 'a further detrimental effect', including a 3bn back-pay liability, much of it to be accounted for in 2007-08, and a warning from HM Revenue and Customs that tax and National Insurance will have to be paid on any back-pay deals, pushing up the cost of these settlements by 26 per cent.
The statistics make for grim reading. The area with the highest liability is the West Midlands with 928m followed by the North West, Yorkshire and Humberside and the North East (see box). Birmingham City Council, for example, estimates that the cost of carrying out job evaluation, implementing a new pay structure and meeting back-pay liabilities could leave it with a bill of around 250m.
Dominic Hinks, regional organiser of the GMB union with responsibility for the city council's employees, says that this is an initial calculation and the authority may have underestimated the true cost. He says the council is trying to reduce its liabilities by 'refusing to recognise itself as the employer for school-based staff. Therefore, any equal pay liability there may be rests, not with them, but with the schools.' He points out that this is the largest group of workers among the council's 40,000 staff.
Stephen Moir, director of people and policy at Cambridgeshire County Council and vice-president and lead on pay and the workforce for the Public Sector People Managers' Association (PSPMA), says that because schools are 'relatively autonomous organisations', local authorities cannot have the same approach to them as they would with directly employed staff. He says, 'All local authorities can do is to seek to influence schools and give them best practice advice on adopting new pay arrangements.'
He cites poor funding and a failure to set a deadline at the outset as the chief reasons for the delay in implementation. The deadline of April this year was only set in 2004 and fewer than half the UK's authorities have met it.
Mr Moir argues that it is 'absolutely right legally and ethically for equal pay to be put in place', pointing out that the original equal pay legislation dates back to 1970. But he warns that the financial implications 'will not just mean one-off pay bill increases but an ongoing year-on-year rise. For schools with finite budgets that can be quite challenging to manage.'
Phil Badley, president of the PSPMA and assistant director of business services at Stockport Council, which is yet to complete single status, says progress has been 'made more difficult by recent case law and the intervention of "no win, no fee" solicitors'.
His authority has sought to reach compensation deals with individual employees. It has avoided the term 'back pay' and compensation payments are being offered on the basis that the individual employee 'might' have a claim.
Union response
The LGE report says that 'trade unions are becoming paralysed due to legal action from "no win, no fee" solicitors', which is preventing local deals.
If there is found to be a claim for back pay then employees are entitled to receive six years' worth. However, unions have been wary of pressing too hard on this issue as they are aware that there could be a knock-on effect on their members' jobs and have often not sought the maximum pay-out.
Groups of solicitors have then stepped in to unpick many of these deals and press for legal action against local authorities, individual councillors and unions on the basis that they have not pursued fully the interests of their members when it comes to back pay. They have particularly targeted women employees on the grounds that they may have a case for discrimination when compared to the pay and conditions of male workers.
The LGE report notes that a recent employment tribunal - Allan v the GMB - found against the union on the grounds that it had 'rushed headlong into accepting an ill-considered back-pay deal, accepting the authority's plea of poverty'. The union has lodged an appeal.
Dominic Hinks sums up the union dilemma: 'While we have a duty to pursue claims on behalf of our members, what's the point of me obtaining a pay deal for, say, catering staff if the outcome is that the local authority then contracts out that service because they can't afford it any more?'
He bemoans Government failure adequately to fund pay equalisation in local authorities, contrasting it with the way that the Treasury financed the Agenda for Change process affecting pay structures within the NHS.
'Costly' solutions
Mr Moir suggests that it is highly unlikely that liabilities arising from single status can be met by using council reserves - a view endorsed by the LGE report.
The report states that at the end of 2005-06 local authorities held nearly 12bn in reserves, but ahead of any employment tribunals individual councils were reluctant to be specific about amounts held 'in order to minimise potential liabilities'.
The report adds that authorities which are unable to use revenue funding to meet their liabilities are 'looking to capitalise expenditure'.
Capitalisation is a process in which local authorities are able to borrow against their assets over several years. But the Treasury has said that moves to meet back-pay settlements in this way will be subject to an overall, national cap of just 200m - well below West Midlands'
estimated liability. A measure of the panic in local authority circles is indicated by the fact that the Treasury has already received capitalisation applications in excess of 320m.
Mr Moir, whose council completed its own single status agreement in 2003, says that local authorities faced with major liabilities may have to manage their costs 'through workforce downsizing, selling off assets such as land and property or eventually through council tax increases'.
He adds, 'Most of the employees of an authority area are also residents of the same geographic area and I am sure the last thing they want is a settlement which on the one hand is quite attractive and then to find the costs passed on either in reduced services to the public or council tax rises.'
Mr Parkin says, 'If the potential liabilities are as high as estimated then there could be reductions in jobs and services. These things should have been thought about when single status was first introduced.'
As for the campaign for a national agreement to ensure pay justice for nursery nurses and school support staff - an idea floated two years ago by Ruth Kelly when she was education secretary - the Government and employers may be stalling on this because of fears that amid the current chaos such an agreement could lead to further complications and more costly litigation.
BACK-PAY LIABILITIES BY REGION
South West 100m
East of England 18m
South East 35m
London 123m
Yorkshire and Humber 371m
North East 300m
North West 740m
West Midlands 928m
East Midlands 83m
Wales 305m
Scotland 560m
