Bankrupt Birmingham City Council agrees huge equal pay deal after £760m dispute

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Birmingham City Council has reached an agreement to settle thousands of historical equal pay claims costing millions – just over a year after going effectively bankrupt.

GMB Union, which brought the claims alongside Unison, said the agreement meant four years after launching its campaign 6,000 low-paid, predominantly women workers should finally receive settlement payments from the local authority.

Payouts are expected to be up to four times higher than those offered to workers in 2021, with settlements expected to take place in the middle of 2025, the union said.

The Labour-run council declared itself effectively bankrupt in September last year after it was facing a £760m bill to settle the claims, and was said earlier this year to be on a “narrow path to financial sustainability” dependent on budget cuts.

The dispute relates to staff in female-dominated roles, such as teaching assistants, who have historically been underpaid in relation to those in male-dominated areas of the council, such as waste collection.

Rhea Wolfson, GMB’s head of industrial relations, described the agreement as a “historic outcome” for women employed by the council.

“This result would not have happened without their dedicated and tireless leadership of a campaign which has overcome huge odds,” she said.

“They were told there wasn’t enough money, that they must accept that women workers are paid less.

“But they showed council bosses that the show doesn’t go on without them. Their bravery on the picket line, in the classrooms, care homes, offices and workplaces across Birmingham has been staggering.

“Pay discrimination is rife and GMB will not turn a blind eye when women workers are being shortchanged.”

In a statement issued on Tuesday, the local authority said a framework agreement will be put before its cabinet committee next week to seek formal approval for the plan.

The full terms of the settlement reached with GMB and Unison are confidential, but the council said the cost of the settlement falls within the limit of an Exceptional Financial Support package agreed with the previous government in January.

Councillor John Cotton, leader of Birmingham City Council, said: “This framework agreement marks the end of an intense period of dialogue between the council and its unions.

“It is an important step on the council’s improvement journey. I would like to put on record my thanks to GMB and Unison for the constructive way in which they have approached these negotiations.

“I was appointed as leader to end the failings within this council that led to the equal pay liability, and this framework agreement is intended to mark the start of a new era of productive and progressive industrial relations built on trust and mutual respect.”