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A second section 114 notice has been issued at Birmingham City Council because the authority is open to unlawful additional liability being accrued in relation to equal pay claims.
The new notice, issued by interim director of finance and section 151 officer Fiona Greenway, highlights that the council must implement a Pay Equality System that would prevent this liability continuing to grow in the future.
The notice comes as a meeting of the Council Business Management Committee was postponed and thus no decision was made on a new pay structure for the future. Two trade unions rejected proposed amendments to a possible new structure while a third did not respond.
Council leader John Cotton said the meeting was postponed to allow government-appointed commissioners time to examine the options and give a view. But the council’s monitoring officer Janie Berry issued a separate section 5 notice as a result of the postponement, saying the authority’s position might be legally problematic.
Current estimates of the council’s equal pay liability of between £650m and £760m assume that a new Pay Equality System is implemented on 1 April 2025. At present, the potential liability is accruing at a range of £5m to £14m per month.
The new s114 notice must now be considered at an extraordinary meeting of full council within 21 days of the issue of the notice.
The council must make a lawful decision to commence a process to deliver a Pay Equality System that concludes by 1 April 2025, Greenway noted. A failure to do so will result in yet another s114 notice being issued.
The first s114 notice, issued on 5 September, requires the council to implement a Financial Recovery Plan to ensure the authority can pay for the equal pay liabilities.
Levelling up secretary Michael Gove announced proposals for government intervention at Birmingham City Council earlier this week.
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