“Equal Pay in Local Government”
Good morning. The first item of business is a debate on motion S3M-4940, in the name of Duncan McNeil, on the Local Government and Communities Committee's report on equal pay in local government. We have a small amount of flexibility on timing, but I ask members to stick approximately to the time that they are given.
I welcome the opportunity to open this debate for the Local Government and Communities Committee. However, I regret the fact that we must have such a debate, because it means that equal pay still has not been fully sorted out in local government and that cases for a large number of workers, especially low-paid female workers, remain unresolved.
Councils and unions made an agreement on single status way back in 1999. It is now 2009, but issues have still not been resolved. I do not intend to go through the various delays in implementation of single status—the Finance Committee's report on the issue in session 2 dealt with that issue well. However, if implementation of single status had not been delayed, we might not be where we are today. The current position is quite concerning. At the time of our inquiry, around 35,000 equal pay cases were lodged with tribunals, with no resolution in sight. We wanted to assess fully the current situation and, crucially, to look at potential solutions.
I thank everyone who gave us oral and written evidence. Thanks are also due to the clerks, the Scottish Parliament information centre and all committee members who worked on the issue.
Our report sets out the background to the current situation, helpfully explains the different types of equal pay claims that might be lodged and makes a number of recommendations that we hope will bring some kind of resolution. Essentially, single status was supposed to be implemented in all local authorities to harmonise terms and conditions and to eradicate discrimination. At the time of our inquiry—10 years down the line—26 of the 32 local authorities had implemented it.
Equal pay claims can arise for a number of reasons. There may be work rated as equivalent claims, where jobs have already been rated the same. That was the case for manual workers in local authorities, where an evaluation was carried out in 1987 but workers continued to attract different earnings, mainly through the payment of bonuses. Work of equal value claims may arise because an authority has not implemented equal pay or, where it has, because individuals claim that equal pay has not been implemented properly. There may also be claims as a result of recent court judgments, about which I will say more later.
Throughout our inquiry, everyone kept telling us how complex the situation is. We realise that the issues can be complex, but we know that local authorities have not only an obligation but a duty to ensure that there is equal pay for work of equal value. We need to find a way through the problems. The situation has become even more complex because of the legal rulings and case law that have developed. That is not surprising, given the time that it has taken to implement single status.
It became clear to us that it is likely that, of the thousands of cases that have been lodged, a fair number could be considered strong cases. In some of them, the main issue is not whether discrimination occurred but the level of compensation that was offered. Our view on strong cases is the same as that of Philip Barr, the human resources director for the City of Edinburgh Council, who said:
"It is a no-brainer for most councils: we cannot win these cases in court."—[Official Report, Local Government and Communities Committee, 18 March 2009; c 1815.]
Councillor Michael Cook of the Convention of Scottish Local Authorities said:
"it seems to me only common sense that if the cases are persuasive and have strong merit the local authorities will be under pressure to look at settling them."—[Official Report, Local Government and Communities Committee, 22 April 2009; c 1915.]
For all of those fine words, cases are not being settled. To be clear, the committee is not asking local authorities to settle cases that they think have no validity, but surely it serves no one well for strong cases not to be settled. The problem is that no one seems to be prepared to make the first move and that there is no agreement on how to take things forward. Regrettably, this has become a very litigious situation—unions are taking cases against local authorities and no-win, no-fee lawyers are taking cases against unions and local authorities. While all of that is going on, low-paid workers are being denied justice and compensation. Justice delayed is justice denied.
That is why the committee recommended that all parties—local authorities, unions and lawyers—should be brought together to reach an agreement on how to deal with cases in the system that are considered to be strong. They need to be brought together by someone, and we believe that that someone should be the Scottish Government. We are not suggesting that the Scottish Government should look to impose any kind of settlement; we are simply saying that it should facilitate a meeting.
Our recommendation echoes the call by the Finance Committee in session 2 for all parties to enter into discussions, facilitated by the Scottish Executive, to sort out the implementation of single status in all local authorities. The deputy convener of the Finance Committee at that time is now the Cabinet Secretary for Finance and Sustainable Growth. We were disappointed that, in response to our recommendation, he did not offer to facilitate a meeting, saying instead:
"The Scottish Government has encouraged COSLA to find a solution to this point and will continue to encourage COSLA to resolve issues … quickly".
However, I was pleased that in his response Councillor Michael Cook of COSLA said:
"I will undertake … to write to all councils suggesting that if there are claims which are particularly meritorious, then early consideration should be given to reaching a settlement."
It continues to concern us that, if the nettle is not grasped now, we will make no progress and will find ourselves in the same position months, if not years, down the line. In the intervening period, there could be another set of court judgments or case law, with the result that, as soon as one set of problems is resolved, another arises, adding to the already extensive costs.
One case has become known as the Bainbridge judgment. Following an evaluation, pay protection was found to favour male employees—another complication—and was considered discriminatory. Although the Bainbridge judgment is not a blanket ruling, and each pay protection scheme should be considered on its merits, it is clear that it will be difficult for local authorities to prove that such schemes are not discriminatory. The judgment could give rise to further claims and costs. Although not all authorities believe that it will, the committee wants to stop the situation becoming more complicated. That is why we have recommended that, if it has not already done so, COSLA should publish comprehensive guidance and advice to local authorities on the implications of the judgment.
We are also asking COSLA to consider putting together a framework agreement, with a payment matrix, and to agree that with the trade unions, to deal with any cases arising from the Bainbridge ruling. We suggest a payment matrix because we do not want to get into the situation that we are in at moment of cases being taken because the compensation that has been offered is not sufficient. To ensure that there is agreement on the matrix, we say that compensation levels should more accurately reflect the individual's loss, which may not have been the case in the past.
Of course, all of that costs money. We are all aware that there is a major squeeze on public sector spending. However, although we are in tough times, we must remember that many local authority workers have been discriminated against and should be paid compensation. That is why we have recommended that, in the all-party discussions that we have said should take place, consideration should be given to staged payments. That would make it possible to set compensation at a level that is acceptable to individuals and their representatives but in a way that allows authorities to spread payments over a certain time period.
The Scottish Government can also help with funding for equal pay by allowing local authorities to capitalise their assets. In other words, authorities should be allowed to treat new expenditure as capital and not revenue and so fund that expenditure through borrowing or capital receipts. We were pleased to hear that the Scottish Government has begun discussions with COSLA to put in place a capitalisation scheme in Scotland. We ask the Government to produce a timetable for establishing the scheme as soon as possible. In its response to our report, the Government confirmed that a scheme outline had been agreed and that it would be discussed shortly with HM Treasury, which has to give its approval. Perhaps the cabinet secretary can update us on those discussions. We take encouragement from the news over the past couple of days that additional money will be made available in England and Wales through such a mechanism to address the issue.
With all the emphasis on claims for back pay for past discrimination, we must not lose sight of the fact that we have to ensure that we have robust, non-discriminatory pay schemes going into the future. Alex McLuckie of the GMB summed that up neatly when he said:
"Equal pay is about setting the future rate. Believe it or not, that could be more advantageous to female workers than the back money. If someone has 20 or 30 years to work, they will benefit from the higher rate for 20 or 30 years."—[Official Report, Local Government and Communities Committee, 11 March 2009; c 1782.]
It is disappointing that there is still disagreement over whether the councils that have implemented single status have eliminated discrimination. The unions assert that discrimination still exists, but COSLA does not accept the point. As a committee, we will not try to arbitrate on the issue, but we hope that our recommendations go some way to resolving it. We recommended that COSLA should introduce, in conjunction with the unions, an agreed and independent assessment system for new pay and grading arrangements. We also said that Audit Scotland could check whether that had been done as part of its best-value audits.
We also recommended that, if local authorities were not already doing so, they should carry out annual equal pay audits. Finally, we recommended that the Government should have discussions with COSLA on the issue of regular reviews and equality proofing. We welcome the Government's response that it is
"happy to work with local government to improve and advance equality".
That said, I would welcome some detail from the cabinet secretary on what that will mean in practice in relation to equal pay.
This was a deeply frustrating inquiry for the committee to undertake—frustrating because everyone seemed be say, "We recognise that there are issues to be sorted out. We are willing to sort them out," but the issues have not been sorted out. Our committee is the third committee of the Parliament to have looked at the issue of equal pay. If it was frustrating for us, we can only imagine what it is like for the workers who have not yet been properly compensated. Have workers not been compensated because they are low-paid women workers?
In our evidence taking, we heard stories of compensation offers—they could also be called bribes—being dangled in front of low-paid workers just before Christmas, a time when the prospect of a reduced offer may appear better than no offer at all. We heard about low-paid women who had been in the system for nearly six years. Our recommendations give a way forward. I hope that all parties take them on board. As a committee, we want to continue to monitor whether progress has been made. We will do so.
All the unresolved issues create a huge amount of uncertainty in what are already uncertain times. We need to resolve past discrimination, but we also need to ensure that discrimination does not happen again. As our report says:
"That will give the greatest certainty."
I am happy to move the motion on behalf of the Local Government and Communities Committee.
I move,
That the Parliament notes the conclusions and recommendations contained in the Local Government and Communities Committee's 12th Report 2009 (Session 3): Equal Pay in Local Government (SP Paper 292).
I welcome the opportunity to offer the Scottish Government's response in the debate to the report from the Local Government and Communities Committee, "Equal Pay in Local Government". I thank the committee for the report and the convener for his remarks to the Parliament today.
This is an important issue; one that is directly relevant to the Government's economic strategy and purpose. As a Government, we are committed to working with others to tackle the significant inequalities in Scottish society, including equal pay. The issue is one that the Scottish Government has taken and continues to take very seriously indeed. Over the course of my remarks, I will set out some initiatives that the Government is taking to advance the issue. The Government believes that a fairer distribution of wealth is key to economic growth. Equal pay is an important part of that assessment and consideration.
As the Parliament knows, the issue for local government goes back to the negotiations that COSLA and the trade unions undertook on equal pay and single status that resulted in the 1999 single status agreement. The Scottish Government was not involved in the negotiations, nor has it been directly involved in implementing the agreement since that date. COSLA has always accepted that the issue is one that local authorities should properly address. We have encouraged them to resolve the issue as quickly as possible. Of course, the former Scottish Executive also adopted that position.
I note from the report that the committee shares our concerns—indeed, the convener fully made the point in his remarks today—that the process of implementing single status has taken a great deal longer than any of us would have wished. Like others, I am disappointed at the length of time and cost in achieving progress. That said, we have to acknowledge the indications from COSLA and the local authorities of their willingness and desire to bring the matter to a positive conclusion in as short a time as possible.
It is my understanding that 26 of the 32 councils in Scotland have now implemented agreements and that, of the remaining six, five are on target to do so by the end of this year. The final council is on target to do so early in 2010. I hope that that signals that the end of the process may at last be in sight. As I said, the process is one for local, not national, government. As such, it is not for the Scottish Government to step in and dictate the implementation of agreements where that has not been achieved. Doing that would be inappropriate and counter to the spirit of our relationship with local government.
In its report, the committee made a number of important recommendations that relate to the involvement of the Scottish Government. I will offer some specific comments in relation to the issues. The committee made recommendations around the implementation of a capitalisation scheme that would allow local authorities to borrow to meet the costs of all their equal pay and single status costs. The convener spoke earlier about the importance of such a scheme.
As I stated to the committee in April, the issue was raised by COSLA some months ago. As a result, we have been working jointly with COSLA on the terms of a capitalisation scheme under which councils may apply for consent to borrow to meet the costs of back claims for equal pay. That work is now complete. I can confirm to Parliament today that Her Majesty's Treasury has just consented to the terms of our scheme, which will be welcome news for local authorities. Following a short consultation with them on the details, individual authorities will be invited to submit applications to the scheme, which will be introduced in the current financial year.
The committee also sought clarification on whether there would be sufficient flexibility within any capitalisation scheme to ensure that local authorities could meet all their single status and equal pay liabilities. We all need to recognise that borrowing in itself is not a solution to resolving the financial difficulties. It will assist in dealing with much of the financial strain, but it will not resolve all of the issues.
I welcome the cabinet secretary's announcement on the capitalisation scheme. Is there a limit on the amount that will be made available?
Obviously, as I am sure Mary Mulligan understands, there is never a blank cheque from Her Majesty's Treasury. We will try to accommodate in the scheme as many as possible of the requests for assistance from local authorities. We have a framework in place with Her Majesty's Treasury, which it has provided for us. Once we see the applications from authorities, we will assess whether enough resource—enough consent—has been made available in the scheme to meet all the applications. We will, of course, continue to discuss any remaining issues with Her Majesty's Treasury in the light of submissions.
During the past couple of days it has been indicated that £500 million is available to local authorities in England. How much will be available to local authorities in Scotland?
As I said to Mary Mulligan, the Government has been in discussion with Her Majesty's Treasury. We have a framework in place, and the resources that will be available will depend on our dialogue with the Treasury. We have given the Treasury an indicative assessment of what we think will be required, and we will await the submissions from local authorities to determine whether that is adequate and appropriate to meet the needs of local authorities in Scotland. I assure Mr McNeil that the scope of the framework is such that what will be available to Scotland will be comparable with the resources that are available to England, on a proportionate basis.
The cabinet secretary will recall that the capitalisation scheme that was approved for Aberdeen City Council was in the order of £11 million—if my recollection of the evidence that the committee heard is correct. Can we assume that the Scotland-wide national scheme will be proportionate to that, vis-à-vis other councils? The cabinet secretary is not normally slow to tell us how much he is demanding from HM Treasury, so will he explain why he is so loth to give us a simple figure for the maximum limit that will apply to the scheme?
It is highly unlikely that the resources will be comparable, on a proportionate basis, with those that were available to Aberdeen City Council. I said to Mr McNeil that I thought that the figure that would be available to Scotland would be proportionate to the £500 million figure that is available to England, but the figure's ultimate size will be the subject of discussion with HM Treasury.
Mr McLetchie should know that I am at the most reasonable end of the spectrum on such questions and that I am perfectly happy to have an orderly and open discussion with the Treasury when I have the information about the scale of demand in Scottish local government. I cannot give the Parliament a guarantee that the capitalisation scheme will enable local authorities to meet all their liabilities in relation to equal pay, because in essence that will depend on the strength of the business case from individual local authorities. As I said, there will be a cap on the amount of borrowing that is put in place by HM Treasury to meet equal pay back costs.
The committee recommended that all the relevant parties be brought together to reach an agreement on how to deal with the equal pay claims in the system that are considered to be strong. The committee recommended that the Scottish Government facilitate the discussions. In line with previous Administrations, I reaffirm that I believe that given that councils are independent autonomous bodies, it is for councils to address the matter. The Government does not believe in micromanaging councils, but we think that councils must resolve the position in the interests of fairness for the staff concerned and the council tax payers of Scotland. Of course, the Government will act where it can, as we have done in relation to the capitalisation scheme. We will work to find solutions where we think that there is a role for the Government to exercise that responsibility.
We have consistently encouraged councils to resolve the issues as quickly as possible, to remove the uncertainty for local government finances and for council employees who are involved. To assist in that process, under the arrangements that are in place for financing local government through the concordat, the Government has provided local government with much greater freedom and flexibility to utilise resources through the relaxation of ring fencing and the ability to retain efficiency savings. We have also halted the budget share decline that took place under the previous Administration: we are providing local government with a rising share of the Scottish budget in the 2008 to 2011 spending review period. Those measures, taken together, are supporting an improvement in local authorities' ability to manage the equal pay issue and other financial pressures that they face. As Duncan McNeil acknowledged, we are moving into a tight period for public finance, so it is essential that local authorities resolve the issue satisfactorily.
The committee recommended that the Scottish Government enter into discussions with COSLA on regular reviews and equality proofing in the future, and that we give advice and support where we can. Local government has responsibilities in relation to equality and is under an obligation to undertake equality assessments on policy interventions. That obligation must be met as part of the orderly undertaking of the business of individual local authorities.
Will the cabinet secretary give way?
I am drawing to a close.
Equal pay is a significant issue. I welcome the committee's input into discussions on the matter, which I hope will, along with the capitalisation scheme, provide the impetus to help to resolve the issue on behalf of many low-paid workers in Scotland and to give certainty to the execution of local government finance in Scotland, which is a priority for everyone in local and national Government.
I am pleased to respond on behalf of the Labour Party. I congratulate the Local Government and Communities Committee on picking up the topic and I thank witnesses, committee clerks and everyone who took part in the inquiry.
As the committee's convener Duncan McNeil said, this is the third time that a committee of the Parliament has considered the issue. I share his regret that even after 10 years of devolution the matter has not been sorted out. The result of that failure is that for many thousands of low-paid, mainly women workers in local government and the health service, the issue of equal pay remains unresolved.
The right to equal pay was enshrined in the Equal Pay Act 1970, but almost 40 years later a gap remains between what is paid to male workers and what is paid to female workers—and not just in traditional jobs. In some cases, the difference is more than 20 per cent, which cannot be right. As Mr McNeil said, the 1970 act refers to individuals who do work of
"the same or a broadly similar nature".
Ten years ago, the trade unions and local authorities reached an agreement on single status, in an attempt to harmonise the terms and conditions of manual workers, who were mainly male, with those of administrative, professional, technical and clerical workers in local government, a large number of whom were female. The single status agreement involved examination of a number of issues: pay, grading, working hours, annual leave, sick leave and negotiating mechanisms. There was also an attempt to deal with the thorny issue of bonus payments, which were paid in some jobs and not in others.
As an aside, I mention that bonuses on a different level were exercising the minds of members of the Economy, Energy and Tourism Committee yesterday. Indeed, those bonuses featured in news bulletins last night and today. It looks like there is some progress from the bankers after all this time. Reluctance to give up bonuses is not restricted to bank executives.
The driving force behind single status was the need to have harmonised and non-discriminatory pay scales. The issue of equal pay has always been linked with that stated objective. It was always recognised that there would be winners and losers in the exercise, but an element of pay protection was a cushion for people whose job evaluation went down.
As members know, the original deal was signed in 1999. At the time, it was hoped that single status would be fully implemented by 2002, three years later. That proved to be a false hope, and unions and local authorities extended the deadline by a further two years. That deadline also came and went. We know from reading the committee's report that by 2006, when the Finance Committee carried out the most recent parliamentary inquiry into the implications of the single status agreement, only one local authority had implemented single status. The delay led to a number of equal pay claims being presented to industrial tribunals. As we know, 35,000 or so claims are still to be decided. It is obvious that settlement of such a large number of claims will come with a price tag, which is a major cause of concern to our local authorities.
As Mr McNeil said, Mr Swinney was deputy convener of the Finance Committee when it published its inquiry report in 2006. During that inquiry, Mr Swinney had a spirited exchange on the matter with Tom McCabe, who was then Minister for Finance and Public Service Reform, with responsibility for the matter. Mr Swinney said then:
"There is … a problem that must be resolved and from the evidence that we have received, it looks to be no closer to resolution today than it was a number of years ago. I am interested in whether the Executive is considering offering arrangements to local authorities subject to certain conditions"
to resolve the single status agreement.
"Is that the subject of negotiation with local authorities?"—[Official Report, Finance Committee, 21 February 2006; c 3420.]
Mr Swinney now finds himself in the position of having to answer the question. He has just let us know his preference.
I am always delighted to engage in historical discussions with Mr Whitton. Does he acknowledge—he must do from what he said a moment ago—that significant progress has been made since that exchange with Mr McCabe, because 26 of the 32 local authorities now have an agreement in place? From his gesticulation, I assume that I have predicted the course of his speech. I can see the future as well as understand the past.
Indeed the cabinet secretary has predicted the course of my speech. I will carry on because, if he waits a minute, we will get to the point.
Having sparred with Mr Swinney in his former committee, I fear that his was a rhetorical question and, indeed, it proved to be such. However, in an exchange with Mr McNeil on 29 April, the cabinet secretary gave a clue to his thinking. Mr McNeil pursued a similar line of questioning to Mr Swinney's against Mr McCabe. Specifically, he wanted to know whether the Scottish National Party Government had held any talks on whether local government had enough money to settle equal pay deals. The cabinet secretary replied in a refrain that has become all too familiar: it is all a matter for COSLA; the local authorities already have the money and it is not ring fenced. However, he confirmed that there were discussions about capitalisation. Today, we heard from him that those discussions with the Treasury have been brought to some conclusion. I am pleased to hear that, although the cabinet secretary demonstrates a certain reluctance to tell us exactly how much money will be made available.
Earlier this week, the United Kingdom Secretary of State for Communities and Local Government, John Denham, announced that he was giving 37 councils in England and Wales the authority to raise another £500 million to end "years of unfairness" for thousands of low-paid women workers, as he put it. The announcement was warmly welcomed not only by those who will benefit but by their trade unions and the employers. That method of raising finance has existed since 2006, and so far £1.6 billion has been raised for the purpose in England and Wales. As Mr McLetchie said in his intervention, in Scotland, it has been used only once so far: to let cash-strapped Aberdeen City Council raise just over £11 million to settle its single status agreement. Treasury consent has to be received, and I wish Mr Swinney well in his negotiations on that, but I hope that, if he is summing up the debate, he will give us the figure that he seemed reluctant to provide in his earlier exchanges.
Even today, 10 years on, not all of our 32 local authorities have signed a single status agreement. Although the situation is complex, we must ask ourselves why that is. How much will it all cost? Time will tell, but I welcome the report and express the Labour Party's hope that the Government will take on board all the recommendations and implement them in full.
As David Whitton just reminded us, the Finance Committee report of 2006 is instructive because the Cabinet Secretary for Finance and Sustainable Growth was then a member of the committee and was vexed about the financial implications that single status and equal pay claims would have for local authorities. Indeed, Mr Swinney complained to Tom McCabe, the then Minister for Finance and Public Service Reform, that
"hundreds of millions of pounds in contingent liabilities on equal pay are not even making it on to the balance sheet"
of local authorities, and that
"That seems to be an absurd position for us to be in."—[Official Report, Finance Committee, 21 February 2006; c 3427.]
He was absolutely right: it was an absurd position for us to be in. The Finance Committee estimated the equal pay liabilities of councils to be anywhere between £310 million and £560 million and said that implementation of single status and the retrospective compensatory payments that it would entail was the biggest financial challenge that local government in Scotland faced.
I am sorry to say that, three years later, it remains the biggest financial challenge facing local government in Scotland. The bill has become no smaller. Indeed, the upper-end estimate of £560 million from 2006 has been confirmed and validated in 2009 by the level of payments that have had to be made in the intervening period. It does not end there, because further and as yet unquantified liabilities have emerged in the light of the Bainbridge court decision of 2008, and other claims are pending involving local authority administrative, professional, technical and clerical staff, which will also have enormous financial implications if they go against the council employers.
It is true that 26 out of 32 councils have put in place single status pay structures that will, it is to be hoped, cap future equal pay claims by finally establishing non-discriminatory pay regimes. However, the fact remains that 10 years after the conclusion of a national single status agreement between COSLA and the trade unions, the issue has still not been resolved. In that context, it is instructive to consider the concordat arrangements that have been made between the Government and COSLA, in so far as they relate to equal pay claims. Members should bear in mind that when they agreed the concordat, Mr Swinney, on behalf of the Government, and COSLA, on behalf of its member councils, knew well that there were substantial contingent, but unquantified, liabilities in respect of the claims, and that those liabilities would run into hundreds of millions of pounds. Notwithstanding that, COSLA reached an agreement with the Government on funding support for local authorities in which the liabilities were acknowledged to be historic in origin and, therefore, covered within the settlement that was reached.
Members may well wonder how councils could, in negotiations with their principal funder, accept responsibility for unquantified liabilities on that scale, and make no specific reference to equal pay claims and their costs as being one of the exceptional funding pressures, for which provision is made in the concordat, that could be a justification for re-examining funding levels. It is clear that the matter will be covered in the continuing dialogue between COSLA and the Government, but members should not expect to read any reports about that dialogue in public print because the review meetings between ministers and COSLA take place in private. No agendas, papers or minutes are published; they are all state secrets. That says everything about both parties' transparency and their accountability for the historic concordat.
However, I give the Government credit for its willingness to discuss with local authorities a capitalisation scheme to assist them in funding at least some equal pay claims. As we have heard, such a scheme has already been put in place for Aberdeen City Council. I welcome Mr Swinney's announcement and the further information that he gave Parliament on extending the arrangements to other councils, even if he was remarkably coy about the figures. I am indebted to Mr Whitton for pointing out the £500 million of approved funding that the UK Government announced this week for 37 councils in Edinburgh—I beg members' pardon: in England. We would welcome it in Edinburgh.
Ah yes, some of Mr McLetchie's decisions in Edinburgh—
Mr Swinney should wait just a minute and not jump on such slips of the tongue too quickly.
The £500 million for 37 councils in England is part of a package of £1.6 billion of capitalisation funding that has been approved. Mr Swinney talks about a proportionate amount for Scotland, but it would be interesting to know whether he means a sum that would be proportionate to £500 million or to £1.6 billion. If it is proportionate to the latter, the proportions for the 31 other councils in Scotland would be much more comparable to the amount that was approved for Aberdeen City Council. I urge Mr Swinney to tell us the sums on which he is working.
We should not forget that "capitalisation" is simply a fancy word for more borrowing. Borrowing must be serviced and financed over a period of years and, if we borrow to meet equal pay claims, we inevitably constrain our ability to borrow for other purposes, such as building schools.
The Equal Pay Act 1970 came into force in 1975. Would the parliamentarians of that period have believed that, 34 years later, the issues would remain unresolved for millions of workers across the United Kingdom, and that the persons who are mainly responsible for such a failure are not big businesses or private companies but public bodies—namely, councils in Scotland and elsewhere in the UK?
As I have mentioned, a single status agreement was concluded 10 years ago, in 1999, although six councils still do not have non-discriminatory pay scales. Thousands of claims are pending before industrial tribunals, and refuse collectors in Edinburgh are taking industrial action because of their dissatisfaction with how single status, or "modernising pay", as it gets called, is being implemented in this city. The bin dispute has exposed some extraordinary Spanish practices in terms of the way in which such workers have been remunerated over the years, but it is nonetheless the case that those men are not highly paid. They are naturally aggrieved that, for them, pay protection will run out after three years, and their incomes will not only be frozen in the interim, but could fall thereafter. However, we cannot pay them more for a longer period, because that would give rise to substantial claims by thousands of other council employees. In that respect, councils are stuck between a rock and a hard place.
Dither and delay have characterised the whole saga over the past 10 years, for which Government, councils and trade unions must take responsibility. When the sun was shining on the public finances, they failed to resolve the problem and continued to treat their women workers unfairly. Well, the sun ain't going to shine any more on the public finances, and the situation could not have come to a head at a worse time.
The settling of historic pay claims could well result in jobs being lost and front-line services being affected, which is why the Government must get involved in trying to resolve the matter. Leaving it all to the councils and the trade unions is what got us into this mess in the first place.
The Local Government and Communities Committee's "Equal Pay in Local Government" report has been long awaited. As a member of that committee, I welcome the report and note the large volume of work that was done by the clerks, the Scottish Parliament information centre, the convener and other members. As members are well aware, the single status agreement was reached in 1999 between the local authorities and the unions to harmonise manual and non-manual workers' terms and conditions. Each local authority was to implement it individually, but 10 years later, the agreement has still not been implemented in every local authority.
In the intervening period, a number of legal rulings have impacted on equal pay. They, together with delays, have led to a large number of individuals lodging equal pay cases with employment tribunals. Many of the current problems could have been avoided through earlier resolution. The current litigious situation is most regrettable, and is creating caution among all parties. That serves no one well, least of all the claimants, who are mostly low-paid female workers.
The matter was debated in the chamber in November 2006. George Lyon—now an MEP—was Deputy Minister for Finance, Public Service Reform and Parliamentary Business at the time. He said:
"There have been many advances for women in the workplace since the Equal Pay Act 1970 and the Sex Discrimination Act 1975. Despite those advances, however, we know that a pay gap still exists, and in the 21st century it is not acceptable that women are paid less, on average, than men for doing the same work or work of equal value."—[Official Report, 9 November 2006; c 29147.]
The issue has been on-going for many years, and it really does need to be dealt with sooner rather than later.
The Local Government and Communities Committee expressed deep concern about the current number of equal pay cases that have been lodged with tribunals, but which have no resolution in sight. There are 35,000 cases, and counting.
The delays in implementing the single status agreement across the country are unacceptable, and they might have led to low-paid women workers losing out. They could have been entitled to upgrading and backdated compensation but, as a result of the delays, many of them have left or retired without being aware that they could have made a claim—and they might not have received sufficient compensation for years of unequal treatment because of the five-year time limit.
The "Equal Pay in Local Government" report urges all parties to seek a negotiated settlement where possible, and to ease the bottleneck of cases. Local authorities, trade unions and lawyers need to hold urgent discussions on how to deal with equal pay in local government.
In evidence to the committee, all parties expressed willingness for the issues to be resolved, but so far no agreement has been reached on how to take things forward. There are, in the system, strong cases in which, as the committee convener said earlier, the main issue is not whether discrimination has occurred but the level of compensation that was offered. Those cases should be settled now—there should be no more delays.
In a litigious situation, all sides are understandably cautious, which makes it more difficult to reach a negotiated settlement. Joe Di Paola from COSLA commented:
"A series of judgments have meant that everybody takes every single part of an agreement back to their lawyers to have it checked out."—[Official Report, Local Government and Communities Committee, 22 April 2009; c 1939.]
That situation is not satisfactory, least of all to the claimants, as I said earlier.
The committee has recommended that all the relevant parties enter discussions to resolve the issues, and that those discussions be facilitated by the Scottish Government. Negotiated settlements would be ideal. They would give certainty to claimants about the level of compensation, and certainty to local authorities over costs. They would also, I hope, improve the relationship between the parties.
How do we prevent what has happened from happening again? We need not only to resolve past discrimination, but to ensure that no more cases arise in the future. The way forward could be through independent assessment of local authority pay and grading and annual equal pay audits. Those would certainly be steps in the right direction.
Public bodies have a gender equality duty. They must seek to eliminate unlawful sex discrimination and harassment and to promote equality. Public bodies that have more than 150 full-time equivalent staff—in other words, every local authority—are required to publish an equal pay policy statement and to report on it every three years. The Equality and Human Rights Commission can and will investigate gender equality issues. That is a serious matter for all local authorities.
According to COSLA, most authorities have carried out an equality impact assessment on their new pay and grading structures. However, it was not clear whether such assessments had been carried out by the local authority or by a third party. The introduction of an independent assessment system would ensure consistency across Scotland. It is imperative that assessment is conducted independently. Independent equality proofing of new pay and grading arrangements in local authorities will not prevent equal pay claims from being lodged, but it will provide assurance to all concerned, and it can be used as a defence of the system. As part of any agreement, local authorities should act on recommendations that have been made in the independent assessment, and make the necessary adjustments to their schemes.
According to last week's letter to the committee convener, signed off by Councillor Michael Cook of COSLA,
"to date 26 of 32 councils have now implemented the agreement with the remaining six on target to complete the process in 2009."
Interestingly, it seems that COSLA is not convinced of the need to take a national approach. That is rather disappointing—all the more so because its doing so was one of the key recommendations of the Local Government and Communities Committee.
The time that the whole process has taken has greatly increased the cost to local authorities. Funding will be an issue, and the committee has sought clarification from the Government on whether there will be enough flexibility in any scheme to ensure that local authorities will be able to meet their future liabilities in relation to single status and equal pay. We welcome the cabinet secretary's announcement on the matter this morning.
We need to get the issue sorted out as soon as possible and ensure that measures are in place so that we do not find ourselves in a similar position in another 10 years. I hope that the Government will agree to the committee's recommendations in full.
I had some pleasure serving on the Local Government and Communities Committee during its inquiry on equal pay. It is important, when evaluating the committee's report, to acknowledge that the committee spent a significant amount of time examining the issue. As other members have stated—it is worth reinforcing—the committee concentrated its scrutiny on equal pay in local government, although there are, no doubt, many wider issues for other employers and sectors of employment.
The committee held evidence-gathering meetings on four separate occasions.
Before discussing the detailed findings of the committee's report, it is important to look carefully at the origins of the problem with equal pay in local government. As other members have stated, the Equal Pay Act was passed in 1970. However, anyone with even a modest knowledge of the matter will know that equal pay is a complex issue, especially for local government.
A key issue that is identified and recognised in the committee's findings—this was highlighted during the evidence sessions—is the lack of significant progress on the issue, especially given that single status should have been implemented by April 2002. That date was not met and, according to COSLA, single status is still to be implemented by six local authorities—10 years after the original agreement. I am sure that the local government lobby has made, and will continue to make, representations on why that situation was allowed to happen.
Of course, the supreme irony is not lost on those of us who have experience in local government: local authority chief officers received a 14 per cent pay increase in the blink of an eye in 2002-03, on the back of the McIntosh report. Meanwhile, many lower-paid female workers are still waiting for their claims to be assessed. That is, perhaps, a question of priorities.
The failure to settle early has led to many legal aspects, including a number of legal rulings that have had an impact on equal pay and single status. That is particularly true of the July 2008 ruling on Redcar and Cleveland Borough Council v Bainbridge and Others, which centred on whether pay protection arrangements that favour male employees could be justified. In that case, the Court of Appeal ruled that such pay protection could not be justified, but it stated that the verdict was not a blanket ruling. In that context, it is no surprise that the committee report comments that
"there appears to be no end in sight and that as soon as one set of problems is resolved, another set arises."
Therefore, the committee report recommends that
"a payment matrix could be put together with the trade unions to deal with Bainbridge issues."
There was also a great deal of discussion in the committee on the need to equality-proof single status. That is also reflected in the report.
As the report details, the committee is concerned about the costs to local authorities arising from equal pay settlements. The committee wrote to all 32 councils to ask them a number of questions, including about their current position, but not all the local authorities responded. Many seemed to be reluctant to provide detailed information on key questions, in particular on the number of equal pay cases that have been settled and on the number that are outstanding.
I am satisfied that one of the committee's key recommendations is that all the relevant parties be brought together to discuss the settlement of claims at the earliest opportunity. It is worth noting that the Bainbridge judgment throws up potential cost implications for all local authorities. That said, there is a need for better planning by local authorities: for example, East Renfrewshire Council has made no provision for Bainbridge, whereas the City of Edinburgh Council confirmed that it has set aside between £15 million and £20 million over the next three years to meet the cost of Bainbridge claims.
In gathering evidence, the committee spent a considerable amount of time questioning witnesses. That was a useful exercise in drawing out some of the important points that needed to be scrutinised.
The conclusions in the committee's report highlight the committee's concern that—as Jim Tolson mentioned—
"these delays may have led to low-paid women workers losing out. These workers …, as a result of the delays in settling, may have left or retired without being aware that they could make a claim".
There has been a wider debate both inside and outside the Parliament on equal pay. The report's recommendations seek further action to end discrimination. In getting to the heart of the matter to ensure that the issue moves forward, I am pleased that the committee emphasises the need to restore trust between all parties in the process. Once trust is lost, it is very hard to regain. Therefore, the landscape of equal pay in local government is difficult terrain. However, while the debate continues, the meter continues to tick. Every hour that goes by adds another potential hour of additional cost to equal pay settlements.
I welcome the general principles in the Local Government and Communities Committee's report. I thank the committee members, clerks and those who, by providing evidence, tried to ensure that the committee held a meaningful inquiry on equal pay in Scottish local government. I look forward to an early settlement for all concerned and I commend the report to the Parliament.
I share Duncan McNeil's disappointment at the need for today's debate, although I congratulate the committee on producing a well-written report.
It is clear from the evidence to the committee that not only is equal pay in local government incredibly complex but—as John Wilson has just commented—the longer it takes, the more complex and more difficult it will become to resolve. We need political will to ensure that a sensible resolution is achieved. We need leadership from the Scottish Government, which should not impose but should send a clear message that faster progress in working towards a resolution is needed. As Duncan McNeil outlined, and as the committee's report advocates, we need to think through a strategy that enables us to work through the different categories in the tens of thousands of cases, so that progress can be made.
The report suggests a way forward. Its key recommendation, which I believe should be focused on, is on the need for pay audits to check the outcomes of the whole process. There is a danger that smoke and mirrors might be used, so we need to inject some political urgency into the issue.
Delivery of the ambition of equal pay should not be a holy grail but a realisable political goal. Why should women be paid lower wages when they do work that is of equal value and which requires similar skills or training? The situation is completely unfair and unacceptable. Women have lost out because of the slow rate of progress on the issue: they have missed out not only on past pay but on future opportunities. The whole process has treated them like second-class citizens. It is scandalous that the issue has not been resolved. The principal issue is not just about problems in the past, because we are not in a standstill position. For those women workers, things are getting worse.
Just this week, the Liberal-SNP administration of the City of Edinburgh Council decided to investigate outsourcing a fifth of its staff, its clear objective being to cut the salary bill. That will solve the council's single status problem because, once low-paid women workers are transferred to the private sector, their pay will be a private matter that will be hidden by commercial confidentiality. We will lose accountability on quality of service provision, so any gains that are made through job re-evaluation will be lost.
A couple of weeks ago, I attended a City of Edinburgh Council briefing on home care services, which are predominantly provided by women workers. Some innovative redesign work and investment will free up resources to provide improved quality for those who need support. However, buried in the backdrop to that work and hidden in the statistics was an admission that the council plans to outsource—that is, to privatise—its home care services. The council plans to shift the proportion of in-house provision from 55 per cent to 25 per cent. The council freely admits that it wants to cut costs and to bring down its wages bill. Any savings will be paid for by the lowest-paid workers, who are predominantly women. The cuts in their salaries will be paid to private directors, so there will be no equality of treatment.
Has nothing been learned from the cost of privatising services in the national health service, where services had to be brought back in-house? I am already receiving complaints about the quality of care provision by private companies, which have cut hours, provide unreliable services and have a huge turnover in staff. The last thing that vulnerable clients need is to lose out, and women will lose out twice. The vulnerable clients are predominantly women and the hard-working care staff on lower pay are predominantly women. The costs will come in their pay. We know that demographic shifts will mean that we will all live longer and we will have fewer young people entering the labour market. How will we make local authority caring jobs—jobs that are held predominantly by women—attractive to young people in the future if we are cutting back on terms and conditions, on their hours and, in particular, on part-time workers?
This is not a standstill debate—the legacy of inaction over the past few years has meant that some women have already lost out, but they will lose out doubly in the future.
Does Sarah Boyack agree that the problem has not arisen only in the past few years but has been around for the past 10 years, and that inaction by local authorities throughout Scotland, including Labour-led local authorities, has exacerbated the problem?
Absolutely. That is why I fully agree with Duncan McNeil that it is a tragedy that the problem has not been solved. Although it is a complex issue, political will is required. The problem is that we have now got to the point at which the situation is getting worse. Local authorities are not adopting the right solutions. For example, my local authority, the City of Edinburgh Council, is considering shifting 20 per cent of existing council staff from in-house service provision to private sector service provision. That is the wrong solution. Councils needs to sit down with the unions and COSLA—
Will the member give way?
No, thank you. I have just taken an intervention.
Rather than getting into a blame game, we need constructive action. We have debated the issue in the past. If Shirley-Anne Somerville had been here in previous sessions, she would know how passionate members of all the political parties in Parliament have been about the need to build momentum to resolve the issue. I hope that today's debate will result in the building of momentum that will lead to a solution.
Some job re-evaluations are widening the pay gap. What is happening with home care services in Edinburgh, where the pay and prospects of some of our most poorly paid women workers is to get worse, even though Edinburgh has some of the highest living costs in Scotland, is making the situation worse. What does that say about our capital city? That cannot be right. We need action now.
I hope that the tenor of the debate, together with the committee's specific recommendations and the fact that, in the past, the cabinet secretary has been involved in the debate on the issue, will mean that we see cross-party action. When I say "cross-party", I am not talking just about the political parties; I am referring to the involvement of COSLA, the councils, the trade unions and the Scottish Government, which I hope will add a sense of urgency to the debate so that in three years' time, whoever sits in Parliament will not be once again debating the issue because thousands of women workers have lost out and their job prospects, and the services for the people for whom they care, have been made worse. That would be unacceptable—we cannot let it happen.
It seems that, like death and taxes, the issue of equal pay is always with us, so the recommendations in the Local Government and Communities Committee's report on equal pay in local government, which represent an attempt to rectify the present state of affairs, are most certainly to be welcomed.
The difficulties that are associated with putting those recommendations into practice cannot be underestimated. For example, one of the report's key recommendations is that
"all the relevant parties should be brought together to come to an agreement on how to deal with those cases in the system which are considered to be strong and that these discussions should be facilitated by the Scottish Government."
Although that sounds, and is, eminently sensible, it has not yet happened, 10 years after the 1999 agreement on single status.
Why is that? I believe that the answer lies in the evidence that was collected by the Equal Opportunities Committee when it focused on equal pay in local government during its scrutiny of last year's budget. The committee's subsequent report to the Finance Committee highlighted not only the extent of the equal pay problem, which has been described as the
"greatest destabilising force in the history of local government finance",
but the complexities and significant costs that are associated with managing unequal pay. Sadly, it appears to be the case that all the efforts of the key players, including Audit Scotland, COSLA, the local authorities and even the Scottish Government, have gone into managing unequal pay, at a huge cost to the public purse.
I will explore that issue further by looking at the role of each player in turn, beginning with the local authorities, which, according to the Scottish Trades Union Congress, have spent at least £1.6 million of taxpayers' money on opposing thousands of equal pay cases against them. They have used council tax payers' money to fund substantial legal bills in order to block equal pay claims in the tribunal system. According to an employment lawyer from one firm of solicitors, that has resulted in the excessive costs that are associated with prolonged litigation. The litigation is predicted to continue for at least the next decade, so the legal costs alone for councils will continue to be colossal.
In those circumstances, surely Audit Scotland, which audits local authorities and public bodies, and the remit of which includes auditing them on whether finances are being managed to the highest possible standards and, crucially, on whether they are achieving the best possible value for public money, would have something to say about such blatant squandering of public funds. Not so—instead, Audit Scotland appears to be interested only in verifying that the figures in the financial statement are correct and in highlighting the fact that it has done a risk assessment by identifying the number of cases and appeals that are likely to succeed in tribunal. After that, it is content to record that as a contingent liability and, having stated the blindingly obvious, it appears to consider that it has fulfilled its scrutiny obligations.
To date, best value and the practice that some local authorities adopt of prolonging cases and spending vast sums of taxpayers' money on legal advice to do so do not appear to have concerned Scotland's auditor of public bodies in the slightest. Frankly, the complacency evidenced by Audit Scotland's approach is truly breathtaking.
Meanwhile, at a time of council tax freezes and tight local government settlements, rather than actively encourage mediation, COSLA, the representative voice of Scottish local government which acts as the employers association on behalf of all the Scottish councils, has made no attempt to intervene. Instead, it has preferred to sit back and watch council tax payers' money be diverted from front-line services to fund legal challenges to legitimate claims.
I turn to the final key player: the Scottish Government. As the Equality and Human Rights Commission pointed out,
"Scottish ministers are obliged to report on progress and to propose action to address any gaps. The pay gap is … of great concern in relation to the implementation of the equality duty, so it is of direct relevance to the Government in looking at overall progress towards equality."—[Official Report, Equal Opportunities Committee, 30 September 2008; c 606.]
In his reply, which would do Pontius Pilate credit, the Cabinet Secretary for Finance and Sustainable Growth told the Equal Opportunities Committee that, despite the fact that costs could escalate if the equal pay issues were not resolved immediately, he rejected any suggestion that the Scottish Government should enter into negotiations with the relevant agencies to reach a permanent solution. He stated:
"It would be completely inappropriate … to ‘take responsibility for' this issue … because it is within the exclusive competence of individual local authorities as self-governing organisations."
Nor is the cabinet secretary inclined to use any of the special powers that he has
"to intervene in certain circumstances in which local authority finances are not being operated effectively."—[Official Report, Equal Opportunities Committee, 7 October 2008; c 647, 645.]
The approach that has been adopted by each of the key players to the vexing issue of local government equal pay is profoundly depressing. There are significant issues of fairness operating on a number of levels, from the claims of individuals—who are predominantly, but not exclusively, women—that could and should have been settled, to the diversion of precious council tax money from essential front-line services. There is therefore a desperate need to ensure that the budget, local government pay and the continuing implementation of single status agreements are, to use the jargon, equality proofed. It is to be hoped that mechanisms are put in place to address the issue and the costs that it has for the public purse, which, by extension, adversely impact on the wider Scottish economy.
The behaviour of the local authorities and the unions on equal pay has been unacceptable, and I welcome the Local Government and Communities Committee's report. It is clear that the poorest of the most poorly paid workers have been exploited as a result of the failure to settle the matter and implement the single status agreement.
Other members have spoken about the delays. Many of the women concerned are now retired and have never received settlement. I do not think that anybody—the unions, COSLA, local government, the Scottish Government or the Scottish Executive prior to it—has come out of things particularly well.
Duncan McNeil highlighted the litigious nature of the matter and mentioned no-win, no-fee lawyers. I want to concentrate on them.
At the end of 2007, when 97 per cent of all the Fife claims had been settled, a group of constituents came to see me at my surgery. Fife Council had settled, but those constituents had not received a settlement because they were being represented by a firm called Stefan Cross Solicitors, which is based in Newcastle upon Tyne. They had been signed up by that firm through its agent in Scotland, Mark Irvine. They had signed up on the basis of a badly photocopied leaflet that had been distributed through their workforces. It urged them to get in touch with Mark Irvine by phone or by e-mail and boasted:
"Action 4 Equality Scotland can help you to pursue a claim on a NO WIN, NO FEE basis."
Many of my constituents got in touch with Mark Irvine. The next communication that they received was a contingency agreement from Stefan Cross Solicitors. The women had already signed that agreement by the time they came to see me. Many wanted to accept the Fife Council award that their colleagues were being given, but they could not do so because they were represented by Stefan Cross Solicitors. If they had withdrawn from the agreement with that firm at that point, they would have had to pay £500 for every six months that it had represented them. I am using the word "represented" very loosely; I will come back to that in a moment. By the time the women came to see me, withdrawing from the agreement with Stefan Cross Solicitors would have cost them more than £3,000. That was two years ago; they are now in for another £5,000. It is hardly surprising that the litigation is on-going. The women simply cannot afford to withdraw from the agreement.
In January 2008, the women would have had to settle for almost £3,000, despite the fact that the level of representation from the solicitors was a disgrace. In February 2008, they finally received a letter from Stefan Cross Solicitors in which the firm apologised to them for not having provided an update before, despite the fact that it had represented them for three years. The letter to the women—members should bear in mind that it is from a solicitor—finishes by saying:
"If you want to keep up to date with developments then visit the action4equality blog at www.action4equalityscotland.blogspot.com. This is the best source of information. Because of the sheer volume of cases we would not recommend ringing"
the solicitors office
"as it is often very difficult to get through and the admin staff are unlikely to have any additional information that is not on the website."
I have found the actions of the no-win, no-fee lawyers to be despicable. They have exploited those women just as much as the councils or anybody else. The Government should carefully consider the activities of Action 4 Equality Scotland and Stefan Cross Solicitors. Many people know that miners in my constituency were represented by solicitors in compensation claims cases. The solicitors took so much money from the system that the Government and the courts ordered them to pay back millions of pounds.
It is time that somebody looked at the activities of lawyers such as Stefan Cross from Newcastle, and we need to consider carefully the activities of people such as Mark Irvine and Action 4 Equality Scotland. Just how much Stefan Cross and similar solicitors are ripping off such women needs to be investigated. We should not be surprised that the issue is being caught up in the courts, because the longer it is, the more money there will be for pariahs such as the company in question.
It is usual for MSPs to say how pleased they are to take part in a debate. Unfortunately, however, today's debate comes with a certain amount of shame. The fact that there are still a substantial number of outstanding claims relating to equal pay, single status and compensation for what has happened is nothing less than a disgrace. Many people—people in local authorities and trade unions, and locally and nationally elected members—must accept some responsibility for that. Members have mentioned them all. Some of us need to reflect on our responsibilities.
It is a disgrace that women were ever paid less than men who do the same or similar jobs. The fact that the issue was not resolved after the introduction of the Equal Pay Act 1970 compounds the offence. In 1987, there was a job evaluation of manual workers in which the unfair and inconsistent use of bonuses was particularly considered, but the problem was still not resolved. The issue was further considered in 1997, but local authorities were given a two-year breathing space. Later, that was extended by two and then three years—and here we are.
Why did that happen? Members will be aware that, in 1997, local authorities had just gone through the reorganisation process to bring about single-tier local government. That was a difficult time for councils, some of which were bringing together staff from two or more former district councils and staff from the regional councils. I accept that that was not an easy time, but a lot of hard work resulted in solutions to provide staff who had different terms and conditions with a level employment scheme. Why was such effort not put into resolving the equal pay issue and introducing the principle of single status?
There are only two possible conclusions. Either the local authorities and trade unions thought that the issue was too difficult to resolve—given what I have just said about reorganisation, I cannot accept that—or the matter was not given priority because those concerned were mainly low-paid female workers. Nothing that I heard in the evidence that was given to the Local Government and Communities Committee convinced me that that was not the case. A number of people who gave evidence said that we are where we are. I accept that, although I might feel a bit more positive about the future if I did not have the nagging feeling that that phrase was probably used when evidence was given to the Finance Committee in 2006 and to the Equal Opportunities Committee, which did a follow-up report last year. Little progress has been made.
I will try to be positive. We have been told that 26 of the 32 local authorities have now implemented single status agreements, and that the other six authorities are working hard to do so. We know that around 2,500 claims have been settled, although some have been settled only on an interim basis.
In "Overview of the local authority audits 2008", Audit Scotland showed equal pay, related legal costs and single status implementation as corporate funding pressures. The report shows total equal pay costs of £181 million in 2007-08, which compares with £233 million in 2006-07 and £280 million in 2005-06. The liability is therefore decreasing—or is it?
That is probably as positive as I will get this morning. I want to comment on some of the players—those who have been involved in trying to resolve the issue.
My committee colleague David McLetchie has suggested that the issue might have been resolved sooner if the lawyers had been brought in earlier—I am not sure that Tricia Marwick would agree with that. I cannot say whether I agree either, but I would say that, once the lawyers became involved, people appeared to become more reluctant to make a decision, especially as each local authority was seeking its own advice. The fact that local authorities are acting individually has not helped. I know that they have their own legal status as individual employers, but I wonder whether it would have been more productive if they had worked collectively.
I was disappointed that COSLA did not offer more support. I hope that it will act on the committee's recommendation to discuss with the Scottish Government and others the issue of regular reviews and equality proofing for the future and that it will give all the necessary advice and support that it can. That would, at least, be one good outcome from this mess.
The cabinet secretary will recognise that I have not sought to place the blame for the situation with the Scottish Government. However, like Mr Swinney when he was the deputy convener of the Finance Committee, I think that the Scottish Government could play a positive role in the situation. He has mentioned his announcement about capitalisation, and I look forward to receiving further details on that. I also believe that the cabinet secretary could act as a catalyst to bring the parties together. I suggest that he put the people all in one room, sit them down together and not let them out until they have reached an agreement—and, yes, he could provide food and water for them.
And warm accommodation.
Seriously, though, the issue cannot be allowed to continue. It is not in the interests of the councils, particularly those that have recently experienced industrial action over associated measures. It is not in the interest of the taxpayer, who will have to fund the outstanding debt. Most important, it is not in the interest of the women who are central to this. We owe a debt to those who are awaiting a resolution, including appropriate compensation; to those who, unfortunately, lost out and have never been recompensed; and, particularly, to the women workers of the future, who must be assured that such gender discrimination will never happen again. Only when the issue is resolved can the Local Government and Communities Committee take any pride in the report that it has produced.
As a member of the Finance Committee in session 2 and again in this session, I was interested to note the conclusions of the committee in session 2 on the issue. In paragraph 87 of its report, the committee stated:
"The Committee believes it is unacceptable for any public body not to be meeting its obligations under the Equal Pay Act 1970. Therefore, it is dismayed that seven years after the Single Status framework was agreed, these equality issues have not been resolved. Whether delays have been caused by local authorities or by the relevant unions, it is the employer's responsibility to ensure that pay and conditions comply with equalities legislation."
No one in the chamber demurs from that. The frustration that still exists is also felt across all the parties.
Over the past decade, we have seen differences in approaches. A general practitioners contract has been agreed, implemented and reviewed positively for GPs, and a consultants contract has been put in place, with an additional two reviews and a bonus regime for consultants that, in the draft budget for next year, includes a 10 per cent increase in those bonuses. At the same time, however, we have had continuing delays to the agenda for change to address low pay issues in the public sector and the national health service, and to the single status agreement. In both cases, the principles have been agreed, but resolutions have not been delivered. The difference in the approaches that have been taken for the highest paid and the lowest paid in the public sector is a shame that falls not only on the Parliament but on all public sector employers in Scotland. That bias needs to be addressed.
I have referred to notes of meetings that I had with the employer in my local area, Scottish Borders Council, when the Finance Committee was considering the issue in session 2. I knew then that the potential liabilities of £4.6 million in 2005-06 and the on-going burden of a further £2.5 million were going to be met from non-earmarked reserves—that is how Scottish Borders Council was going to operate. According to the information that they have given to the Local Government and Communities Committee, 15 other local authorities have indicated that they, too, may be looking to use reserves.
That brings me to the issue of how we can address the on-going concerns. The on-going liability—the on-going cost—simply must be factored in. We cannot wait to find out whether there is some alternative to treating with equal pay; it simply must be factored in.
The Local Government and Communities Committee convener and others have referred to the Bainbridge judgment, and we have heard the cabinet secretary's comments on that. Bainbridge is out of the hands of any employer, the Parliament or COSLA—I understand that—so how we address it will be critical. From my reading of the committee's consideration and its report, there does not seem to be a clear picture of the potential liability, and I agree with the committee that we should ask COSLA and the Government to put forward a clearer picture. The Government has, rightly, been in discussions with the Treasury on the use of capital consent. At the same time, a parallel piece of work should have been undertaken by COSLA and the Government to produce an accurate picture of what the liability may be.
I ask Mr Purvis to consider the issues that Tricia Marwick raised and the dangers of expressly stating a liability because of the signal that such a statement could give to some of the solicitors who have a financial interest in prolonging the difficulties to which the cases have given rise.
I understand that point, but the capital consent is not a compensation scheme run by the Scottish Government; it will be limited, but the cabinet secretary has refused to say how it will be capped. In England and Wales, it was capped at £1.1 billion until 2008-09. I hope that, in winding up the debate, the cabinet secretary will tell us whether the figure will be Barnettised, which would mean that the Scottish Government had just under £100 million of capital consent to provide to local authorities. I would be grateful if he could confirm that, as it is very important for the public purse.
We know that local authorities will have to make business cases for the use of the capital consent. I would also be grateful if the cabinet secretary could tell us how much non-utilised capital consent is currently in place. Last year, £20 million of non-utilised capital consent was withdrawn from local authorities—voluntarily and in agreement with the Government—to cover the accelerated capital for social housing. What has happened to that £20 million? It will be difficult for the public purse if local authorities are borrowing money to be repaid over a long period—cover that they should be funding themselves—when we have non-utilised capital cover that councils could be using. Those are valid issues.
There has been a burden on local authority staff, especially the women employees who have been discriminated against over the past decade. If we handle the on-going financial year badly, with regard to covering the Bainbridge judgment, there will be an on-going burden for which lower-paid workers will have to foot the bill. That is an additional burden that we should not be covering.
I place on record my thanks to the Local Government and Communities Committee—particularly the convener, Duncan McNeil, and Susan Duffy and her clerking team—for providing Parliament with a comprehensive report on this significant matter.
It is vital that those of us who are honoured to sit in the chamber do all that we can to ensure that all individuals in Scotland are treated equally, no matter what their gender, sexual orientation, race, creed or occupation. It was, therefore, with a real sense of discomfort that, when I met a group of home care workers from North Lanarkshire recently, I heard how let down they feel by the inability of politicians and unions to end the iniquitous situation that sees them paid so much less than their fellow public sector employees. For all that I could tell them about what has been done to address the problem—there has been some movement—the reality is that those workers feel undervalued and underrewarded in spite of the essential service that they provide to deserving individuals in our communities who need support and care in their homes.
Since the implementation of the single status agreement in 1999, which was designed to end discrimination of this nature, a lot of progress has been made to ensure that the terms and conditions of workers are the same no matter what job they do. Single status and equal pay are now inextricably linked. That is only right and proper, but in implementing that policy, we knew that local authorities would need help to meet the financial pressures that were being placed on them.
Unfortunately, as a result of things like the historic concordat—or the infamous con act—local authorities face shortfalls in their budgets to deal with single status and equal pay. In fact, in scrutinising the Government's draft budget for 2009-10, the Finance Committee conducted an inquiry into this issue, such was its concern for councils that have a number of claims outstanding.
It is good to know that, by next year, all 32 local authorities will have implemented the single status agreement, but it is estimated that the number of outstanding claims might cost local authorities hundreds of millions of pounds. We have heard many suggestions of what that figure might be but, whatever the figure is, it does not include the financial implications of the Bainbridge judgment, which John Wilson eloquently outlined.
The most worrying aspect of the committee's report was that there seems to be no conclusion in sight to the outstanding issues that are faced by councils in relation to outstanding judgments and what those decisions could mean for future judgments. As the committee's report says:
"there appears to be no end in sight and … as soon as one set of problems is resolved another set arises".
I understand that, at the time when the report was being drawn up, COSLA had not issued guidance on final judgments, including the Bainbridge judgment, but it was in the process of issuing something. We must see more progress in that regard. The wait for guidance has meant that claimants who are waiting for their cases to be resolved face a greater risk that they will miss out on their claim due to the five-year limit. That cannot be acceptable.
As the cabinet secretary said this morning, the Scottish Government believes that all local government agreements should be achieved without its intervention. The previous Administration, too, took that position but it also stated that it would be willing to facilitate discussions between all interested parties whenever possible, if such a need arose, and those meetings took place.
Given the circumstances that are outlined in the report and the lack of direction from COSLA, I ask the cabinet secretary to look at this matter once more and to call a meeting between COSLA, the trade unions and all other interested parties to discuss the serious outstanding issues.
I seem to recall that, around 18 months ago, the First Minister intervened to provide independent expert arbitration when there was a dispute at the oil refinery in Grangemouth between a private company and private sector employees. Why can that approach not be taken to the problem in the public sector that we are discussing today, which has been going on for more than 10 years? That could help matters to reach a conclusion much more quickly. In saying that, I recognise that responsibility lies ultimately with local authorities, but it strikes me that the matter of single status and equal pay has stagnated and we urgently need the involvement of everyone concerned.
It is time for the Scottish Government to say what it will do to assist local authorities in order to resolve the existing cases and any future cases as soon as possible so that all workers can have equal status. We on the Labour benches have been striving for that for many years. The constituents whom I met recently deserve no less, because they are not worth less than their colleagues.
Once again, I thank the Local Government and Communities Committee for allowing us the time to re-examine this important issue.
I thank the Local Government and Communities Committee clerks, the SPICe team, my fellow committee members and the committee convener, Duncan McNeil, for the work that they have done on the report that is before us.
The inquiry into equal pay in local government was one of the most frustrating exercises that the Local Government and Communities Committee has undertaken. Every witness told us that they were keen to find a way forward on equal pay. Everyone said that they wanted to ensure that people who had suffered discrimination in pay over many years would be compensated and that equal pay for all workers, particularly low-paid women workers, would be guaranteed. COSLA said that it wanted to resolve the equal pay claims, as did the trade unions and individual local authorities. However, there are agreements that date back to 1987, and an agreement between COSLA and the trade unions in 1999 to resolve the issue by 2002 was subsequently extended to 2004. There was no resolution then, and there is no resolution now.
In a report in 2006, the Finance Committee said that the matter should be dealt with within 12 months, but it was not. We are still waiting.
Everyone told us that they wanted to deal with the equal pay claims, but 35,000 tribunal claims are still outstanding. Low-paid female workers need action, not just kind words. It is time for local authorities to get real with regard to their approach to equal pay claims. They must put equal treatment of their female workers on an even footing with their own financial interests.
The reality check for local authorities was summed up by Alex McLuckie from the GMB union, who said in evidence to our committee:
"The range of offers, rather than settlements, was from about 48 per cent to about 95 per cent of what could reasonably be expected to be won at tribunal. That is quite a difference."—[Official Report, Local Government and Communities Committee, 11 March 2000; c 1785.]
Anecdotally, I have heard of one case in which a tribunal awarded a worker £30,000, but the offer from the local authority had been only £3,000. Why would a low-paid woman worker accept £3,000 from a local authority when a tribunal would award £30,000? Local authorities need a reality check. If local authorities are going to offer 48 per cent of what female workers are owed, as Alex McLuckie said, why would anyone take that option? Nobody would settle for that figure.
The committee heard from Philip Barr, from the City of Edinburgh Council, who said that the city would settle cases that it could not win. He called that a "no-brainer", and I agree. It is also a no-brainer to acknowledge that, unless councils get real with their offers to female workers, recourse to a tribunal will be the only option for many.
At the Local Government and Communities Committee, I asked unions and COSLA whether they would consider working more imaginatively to achieve the settlement of equal pay claims. I also asked whether they would consider the option of spreading phased or staggered repayments over a number of years. Both sides said that they would consider that, and such a recommendation is contained in the committee's report.
In 2008, Audit Scotland said that council reserves were £530 million. Some £33 million of that was said to be set aside for equal pay claim liabilities. Staged payments, together with action by the Scottish Government to work with local authorities and the UK Treasury to raise funds via capitalisation, mean that it is finally possible for local authorities to deliver for low-paid workers. The excuses are running out.
Many members have mentioned how wary people who are involved in equal pay disputes are about showing their hand during any discussions and negotiations. We have heard that that is due to the highly litigious nature of the issue. However, that approach is self-defeating. The greater the delay, the greater the scope for lawyers to have their merry way.
It is a matter of regret that COSLA and local authorities have chosen not to deal with the issue of equal pay at national level. That was a serious mistake, which has led to an unclear, patchwork quilt approach to equal pay being taken across Scotland. With the possible consequences of the Bainbridge ruling still to be considered, it is vital that a similar patchwork quilt approach is not taken by Scotland's local authorities and unions in that regard. That is why I strongly endorse the recommendation that, in addition to the publication of advice and guidance, COSLA should consider whether a framework agreement, with the suggested payment matrix, could be put together to deal with Bainbridge. A patchwork quilt approach will fail low-paid female workers. All that such an approach will do is to keep lawyers warm and wealthy—it will do nothing to help the people whom the report is aimed at helping.
I welcome the report, and I hope that it is the last one that the Parliament has to produce in an attempt to deal with the issue of equal pay.
We all recognise that equal pay is an important issue throughout the public and private sectors. Only recently has unequal pay in the financial services industry been properly highlighted, and it is viewed as endemic and extremely difficult to eradicate. However, unequal pay in local government is an issue that we politicians can do something about—indeed, we are obliged by law, under the equality duties, to rectify it.
The Equal Opportunities Committee took very telling evidence on equal pay in local government in February this year. Our report was passed to the Local Government and Communities Committee, and has informed that committee's report. The Equal Opportunities Committee is now taking evidence on equal pay in the national health service, and I expect the same cross-party reaction to the results of that inquiry.
The problem is not as widespread in the NHS, and there are not such huge costs involved. For the individual worker, however, the unfairness of equal pay claims not being honoured in a timely fashion cannot be overestimated. It is undeniably wrong that people who are on low wages—often women—must wait for their legitimate claims to be met. It was pointed out to the Equal Opportunities Committee that some workers have retired or even died without having had their claims met. That is totally unacceptable in the 21st century. It is 100 years since women were given the vote on an equal basis with men, and it is totally unacceptable that many are still waiting to be paid on an equal basis.
In discussing the recession and arguing about budgets, it is essential that we note that it is those who are poorest paid who will feel the brunt of any drop in income and any cuts in services. It is of the utmost importance that every policy, programme and service goes through a rigorous equality impact assessment. We must ensure that we protect the lowest paid and the most vulnerable.
As we have heard today, equal pay is a complex area. Case law has changed during the past few years, and any prior agreements have become subject to those changes. As we have discussed, equal pay seeks to address the historical pay inequality to which women have been subjected. The gap that results from having to make payments following the implementation of the new equality-based pay structure must also be paid for; I welcome the Westminster Government's action to allow councils to use capitalisation to pay for that past inequality, and I recognise that it is only a matter of time until Scottish councils have that opportunity. However, questions still remain with regard to the details and, in particular, the indicative figure that the cabinet secretary is discussing with the Treasury.
As Audit Scotland said, that approach is not without risk. Councils will seek to recoup the borrowing over a period of time, which will in turn reduce the moneys that are available to them in future years, as would be the case with any liability. The Scottish Government has said that that will relate only to the back-pay element of equal payments, and councils will be required by Audit Scotland to say how they will deal with the issue.
Although equality issues are addressed in best-value audits, more prominence needs to be given to the area. Equalities cannot be viewed as a soft option that can be dropped when finances are tight. I would welcome work by the Accounts Commission on gender equality in local government, of the type that it has already done on race equality. There is also potential for equal pay to be included in the next two-year programme of performance audits for 2011-12.
In discussing equal pay, consideration must be given to the impact of single status on equal pay claims, in relation to cases in which—as we have heard—individuals feel that the new salaries are insufficient. I welcome the review of job evaluations, as there are concerns not only about equal pay for equal work, but about the types of work that are equal.
The average woman in full-time work in the UK will lose out on £360,000 in the course of her working life. The fact that the part-time pay gap remains a shocking 32.1 per cent shows that we must maintain a focus on valuing the types of jobs that women do. For example, too many of our crucial caring jobs, which are undertaken largely by part-time female employees, continue to be poorly valued and poorly paid. We must balance the issue of affordability for each council with the poverty that that situation creates. Why should a low-paid worker—usually a woman—have to organise her budget over a number of years to help a local authority or any other part of Government to budget?
In the Equal Opportunities Committee's evidence sessions, it was indicated that the overall cost to the local government wage bill of single status is 4.7 per cent, which amounts to more than £11 billion of central Government funding. As members have said, that issue was missed out of the concordat with local government. It is essential that single outcome agreements highlight the issue of equal pay, and equalities more generally.
As we have heard, more than 30,000 cases are waiting in the Scottish tribunals system, many of which are awaiting the full implementation of single status. I repeat the STUC's findings that local authorities have spent more than £1.6 million in legal fees to fight equal pay claims. That money could have been spent on agreeing to implement a scheme that had been equality proofed. All parties should get together to resolve the cases, particularly those cases in which the dispute is about compensation rather than discrimination. In Scotland, we do not have case law that relates to equal pay issues, but cases such as Allen and Bainbridge apply—as we have heard—throughout the UK.
Everyone who submitted evidence to the Equal Opportunities Committee agreed that litigation is not the best way to resolve the equal pay issue, but collective bargaining has broken down in the light of the Allen case. I urge the Scottish Government to do all that it can to prevent further delays in implementation. I commend the Local Government and Communities Committee's report to members, and I commend the convener's assurance that the committee will continue the important task of monitoring the issue.
I thank the Local Government and Communities Committee and its convener for the work that they have done on the matter. The committee's report is a stark reminder of just how far councils still have to go to implement equal pay.
From the report, it appears that some sort of collective malaise is afflicting local authorities and unions, and compromising their ability to tackle the issue. I hope that the councils, the unions and all the other partners that are involved will be galvanised into more concerted action to resolve the issues that the committee has highlighted. I want more urgency to be brought to the matter, as almost every other member in the chamber has said today.
Investing even more time and effort will not only benefit the tens of thousands of women who are still waiting to be treated fairly, but will limit councils' liability in equal pay claims that come through the courts in the future. It is truly time, as many members have noted, that the matter was properly resolved.
It is clear from the report that councils are still sitting on a financial time bomb; David McLetchie identified that the cost is about £600 million and still rising. Councils will welcome the cabinet secretary's announcement of a capitalisation scheme for retrospective payments at least, provided that it is adequate; I hope that the cabinet secretary will give us more clarity on that.
As many members have said today, the single status agreement was originally signed 10 years ago, in 1999, and the rate of progress since then has been painfully slow. It is clear from the report that the longer the matter drags on, the harder it is to resolve, as more and more court rulings are reached. I agree with the committee's view that if single status had been implemented earlier, a number of the legal challenges would not have come about.
In paragraph 25 of the committee's report, a witness from COSLA is quoted as saying:
"We have a legal obligation to introduce equal pay. We will continue to do that as quickly as we can, but the negotiations have been the most difficult, protracted and complex that I have ever been involved in. Every time there are judgements … the process is set back."
It is clear that the situation will only get worse unless all parties bring some stronger resolve to the matter.
Two of the most urgent points that arise from the report concern the settling of equal pay claims and equal pay audits. All the parties involved should be embarrassed that, as many members have pointed out, more than 35,000 equal pay claims have now been lodged with tribunals. That does not include, as members have said, those women who have retired or died and not been able to bring claims. Everything possible must be done to bring those to closure.
The convener of the Local Government and Communities Committee said earlier that strong cases should be settled, and paragraph 53 of the report states:
"The Committee agrees that it would not be a good use of public money for local authorities to settle cases they believe have no validity. However, it also believes that it serves no-one well (least of all the claimants) for strong cases not to be settled. This is particularly true of cases where the main issue is not over whether discrimination has occurred, but is over the level of compensation."
I therefore agree with Margaret Mitchell and others and commend the following recommendation in paragraph 72:
"The Committee is firmly of the view that all of the parties concerned (councils, trade unions, COSLA and lawyers) should be brought together, to enter into discussions over the potential settling of strong cases that are currently within the system."
Like others, I urge the cabinet secretary to do all that he can to facilitate such a meeting.
I turn to the need for equal pay audits. I was astounded to discover that the committee heard in evidence that the new pay schemes that some councils are implementing have not necessarily been equality proofed. While any doubt remains about that, we will continue to face the possibility that even more equal pay claims will be lodged. The report contains a number of examples. Mark Irvine from Action 4 Equality gave the example of Glasgow City Council. He said that the new structure in Glasgow might well be discriminatory, given that the vast majority of part-time workers, who do not qualify, are women.
The recommendations in paragraphs 112 to 114 go into some detail on what should be done in new pay and grading agreements and state that we need a consistent approach. Paragraph 112 proposes an independent assessment and states:
"the Committee suggests there should be a clause stating that local authorities will undertake any necessary adjustments to their schemes as recommended by the independent assessment."
Comments have also been made this morning about the role of Audit Scotland and the suggestion that, through best-value audits, it should check and report on whether the local authority's scheme has been equality proofed.
Paragraph 114 states:
"On the issue of regular reviews, the Committee recommends that local authorities undertake an annual equal pay audit, if they are not already doing so".
I would like to see mandatory pay audits in both the public and private sectors. What are the cabinet secretary's views on that?
The historical undervaluing of women's work is a disgrace and it is indefensible to allow it to carry on today, yet women are still being undervalued and poorly paid. Unions and local authorities throughout the country seem to have lost sight of that. I hope that the report will bring about some changes.
This has been a good debate on the back of a good report. The Parliament seems to be united in its view that far too long has passed since 1999 for us still to be in this situation. We are also united in the view that we are in a complex situation that will not be resolved overnight or easily. However, the longer it goes on, the more complex it might become. Many members have mentioned the Bainbridge case, which adds confusion where there was already confusion. The committee's report states:
"The Committee is concerned that there appears to be no end in sight and that as soon as one set of problems is resolved, another set arises … The Committee is of the view that if Single Status had been implemented earlier … a number of these legal issues would not have arisen."
There is a danger that, for every month or year for which we delay, more complex legal issues will arise. There could be another Bainbridge-type case next month or next year.
I will focus my remarks for the next couple of minutes on an unresolved issue that has not been explored enough in this morning's debate: Scottish Government facilitation. One or two members have touched on that, and the committee made unanimous recommendations on it. Ten years on, there is a strong argument for the Scottish Government to show leadership in that capacity.
I was struck by COSLA's comment:
"the level of caution is sky-high. Nobody wants to sign anything."
Duncan McNeil put it even more simply today when he said that no one is prepared to make the first move. Mr Swinney asked why the Government should get involved, but when we consider the sheer number of cases—we heard today that there are 35,000 cases, and that figure might rise—along with the potential financial liability and the length of time that it has taken so far, the argument for such involvement is particularly strong. Mr Swinney came back with some reasons, and some of the justifications that he gave are perfectly valid. He said that the Scottish Executive was not involved in the agreement in 1999. That is correct. He also made the perfectly fair point that in 2006, when the recommendation came forward from the Finance Committee, the previous Executive chose not to get involved. That is also true. However, there is an argument that that might have been a mistake by the previous Executive. It is not a justification for why the Government should not get involved today. Although progress has been made since 2006, six councils have still not implemented single status, 10 years on.
Mr Swinney also said that the Government does not want to micromanage. Of course, as a Conservative, I do not want to see the Government micromanaging, but given the sheer scale and volume of the issue, it would be difficult to argue that Government involvement would constitute micromanagement. There are plenty of examples of Government involvement in both public and private issues that are far smaller and less significant.
The question becomes how the Government should act. Mr Swinney is right to argue that it should not go in with heavy boots and come up with an arbitrary decision that forces councils to do this and that. As the report states, the emphasis should be on facilitation. That is where the Government could play a good role. By facilitating, it can get parties together. It is highly unlikely that parties would refuse to come to the table if the offer was put and the initiative was taken by Mr Swinney or somebody else in the Government. That would also help to set a timetable. Under the initial timetable, single status had to be implemented by 2002, but that drifted and it was then delayed until 2004. There does not appear to be a timetable in train at the moment. The Government could help to push things along more quickly.
I reiterate that the entire committee, which has members from the four main parties, agreed that there is a role for Government to play. Mr Swinney's own back benchers, of whom he has three on the committee, agreed with that conclusion. There was no division on that.
There are things that the Government can do to try to push the implementation of single status by the remaining six councils, but it can also play a facilitative role in considering how councils ought to approach the strong cases, of which I am sure there are many among the 35,000. I am sure that there are cases without merit too, but there will be a number of strong cases in which the only point to be argued is one of quantum and the question is how much ought to be paid rather than whether there is liability. It seems wrong that, as a country, we should spend taxpayers' money to defend cases that we know are indefensible. In cases in which the only discussion to be had is about quantum, there is a strong role to be taken. Of course, there is a risk attached to Government action to do that, but the risks of inaction are slightly greater.
I join others in welcoming today's announcement about capitalisation, which represents progress and a good step forward. However, it is useful to repeat the question that my colleague David McLetchie asked. Is the amount proportianate to the £500 million that will go to 37 councils in England, which was announced this week, or is it proportianate to the £1.6 billion that David McLetchie mentioned? It is important for us to know the answer to that question.
I close by reiterating a point that a couple of members made about equality proofing. Duncan McNeil asked whether discrimination still exists. The unions have suggested that it does, but COSLA has suggested that it does not. Probably quite rightly, the committee did not feel able to investigate that in detail, but the fact that the question has been put represents a warning light that the matter is worthy of examination. The suggestion of an independent equality-proofing audit seems pretty sensible. It would probably mean that fewer cases were lodged in the future and it would provide a good defence to councils if cases were to arise, so I commend the suggestion.
Today's debate has once again highlighted the difficulties that have been encountered in dealing with the issue of equal pay for equal work. However, underneath all our talk of single status setting, a matrix for pay deals, tribunals and the rest, we should never forget that what we are really talking about is people's livelihoods. The fact that more than 35,000 equal pay cases have still to be dealt with by tribunals masks the reality: behind each and every case is an individual who feels that they are not getting paid what they should be—and, in the main, they are low-paid women workers whose income is crucial to the family budget.
As Mr McNeil pointed out in his opening speech, everyone who gave evidence to the inquiry said that this is a complex business, and it has become even more complex as a result of the number of legal rulings that have been made and the amount of case law that has developed over the past 10 years. Unions are taking cases against local authorities; no-win, no-fee lawyers are taking cases against unions and local authorities; and, in some cases, union members have taken cases against their own union.
While all this is going on, we hear that six Scottish authorities have still to settle single status agreements. In fact, as Mr Brown has just pointed out, some of them have been warned that their current deals are still discriminatory. We welcome the news that five of those councils will settle their agreements by the end of the year and that the other council will settle next year. However, they should all be reminded that they should have had those agreements in place 10 years ago. At times one has to wonder what some people in local government do for a living.
Members have made some very valid points this morning. Duncan McNeil and, I believe, Mr Tolson pointed out that, in the thousands of the 35,000 cases in the system that are considered to be strong, the main issue is not whether discrimination occurred but how much compensation was offered. The committee takes the same view as Philip Barr, from the City of Edinburgh Council, who said:
"It is a no-brainer for most councils: we cannot win these cases in court."—[Official Report, Local Government and Communities Committee, 18 March 2009; c 1815.]
As Gavin Brown has made clear, in many instances taxpayers' money is being used to contest these "no-brainer" cases in court. That seems to me to be a bit of a waste of money, and it is to be hoped that, when Mr Swinney secures the appropriate Treasury approval and puts in place the proposed capitalisation scheme, progress on such cases can be made—and quickly.
I hope that those who are caught up in a case were able to listen to Tricia Marwick's demolition job on the activities of one firm of no-win, no-fee lawyers. I do not think that any member would support a company that takes advantage of people in that position.
Does Mr Whitton not agree that, in failing to appropriately recompense those who were entitled to equal pay, the local authorities and unions opened the door to many no-win, no-fee companies stepping in and taking up these cases?
Tricia Marwick mentioned one particular firm of no-win, no-fee lawyers. Other firms operate perfectly respectably on a no-win, no-fee basis.
Among others, Mary Mulligan commented on the fact that each local authority had had to settle these issues independently with its own advice—legal or otherwise—and regretted that COSLA had not been able to get the councils to work more collectively. Mr Doris made the same point. When such issues arise, I have occasionally found myself wondering why COSLA does not always take a collective view and operate on everyone's behalf.
The cabinet secretary is well versed in these arguments. Given that, as has been mentioned a number of times, he was a member of the Finance Committee that in 2006 produced the last parliamentary report on this subject, I am confident that he will take a long, hard and—I am sure—sympathetic look at the Local Government and Communities Committee's recommendations. However, I draw his attention to paragraph 79, which relates to the strong cases to which I referred. In that recommendation, the committee echoes the call that was made in the 2006 report but, in this case, in relation to equal pay claims; calls on "all the relevant parties" to be brought together to consider how to deal with the claims in the system that are considered strong; and asks the Scottish Government to facilitate those discussions. As Gavin Brown said, the cabinet secretary is now in a position to implement what he signed up to three years ago, so I hope that he will do so.
As I said in my opening speech, the UK Government is taking steps to allow councils to capitalise even further in order to raise the necessary funds to settle low-pay claims. In his usual thoughtful style, Mr Purvis focused on costs and made a pertinent point about the speed at which deals on above-inflation pay increases can be done for chief officers while the pursuit of equal pay has been bedevilled by delay after delay. The cabinet secretary has made an announcement on capitalisation, but we have still to hear the figures involved. I do not believe the excuse that giving such information will simply help the lawyers, so I ask him to provide some proper detail on the overall sum that he is seeking. Let us be clear: there has been too much delay—and delay costs money. Those who are suffering are the poorest paid.
In conclusion, I want to mention a true champion of the low paid, the former general secretary of the Scottish Trades Union Congress Bill Speirs, who passed away a few days ago and whose funeral is being held later today. Speaking in this debate prevents me and other Labour colleagues from attending his funeral, but I know that Bill would feel it a better use of our time to be here arguing the case for equal pay than to be standing about in Renfrew. There could be no better celebration of his life and work than to see a resolution to this long-running problem.
Gavin Brown said that the Scottish Government could play a leadership role with regard to the potential liability that this matter could engender and, in his opening speech, Mr Swinney referred to the Government's purpose of sustained economic growth. I venture to suggest that that very purpose could be seriously derailed by the financial obligations that might arise from these cases. Mr Brown might be surprised to hear me mention his name so often, but he made many of the points that I was going to make in this speech, and I agree with him that it is time that Mr Swinney followed his own advice from 2006 and got everyone together to speed things up. The time for settling this matter is long overdue. I hope that the cabinet secretary will tell us today that he will take steps in that direction.
First, I associate myself and the Government with David Whitton's entirely appropriate and generous tribute to Bill Speirs, who spent his very distinguished life promoting the interests of working people in Scotland. I am here this morning for the same reason that Mr Whitton is.
In my closing remarks, I want to be as helpful as I can. However, I cannot resist the temptation of highlighting the inherent contradiction in the speech made by Sarah Boyack, who, despite saying that she did not want to take part in the blame game, proceeded to blame the City of Edinburgh Council in some of its actions. I do not think that that helps to advance some of these arguments.
Although the debate has been very good, it has, I think, been flawed. I simply do not think due regard and account have been taken of the progress on single status that has been made in recent years. It is beyond dispute—and I will not try to dispute it—that the process has taken far too long but, as I said in my intervention on Mr Whitton's opening speech, we are not in the position that we were in when the Finance Committee held its inquiry in 2006. At that time, only one local authority had settled its single status agreement—which, of course, raised the completely fair question of what was preventing the other 31 authorities from settling. At the moment, 26 of the 32 local authorities have a scheme in place and, in response to Mr Brown, I point out that the remaining six authorities will have their schemes in place either by the end of this year or by the start of next year. Mr Brown's claim that there is no timescale for resolving these matters is not borne out by the evidence that I marshalled for Parliament in my opening speech.
In my colleague Sarah Boyack's defence, I remind the cabinet secretary that the City of Edinburgh Council is one of the six councils that have still to settle their single status agreements. Is that not the case?
I was merely making a general debating point. The member said that she was not going to take part in the blame game, and then blamed someone else.
Local authorities have assured us that they will take forward the timetable that has been put in place. In any case, we should not forget that 26 of the 32 local authorities have put these agreements in place.
Will the cabinet secretary give way?
Will the cabinet secretary give way?
I am spoilt for choice. I had better take Mr Brown first.
I point out to the cabinet secretary that there is no timetable for dealing with the 35,000 outstanding cases, many of which are believed to be no-brainers.
I will respond to that point later in my speech.
The cabinet secretary pointed out that only one single status agreement was reached in five years but that that figure rose by 25 in the following couple of years. Does he accept that that was because the previous Scottish Executive intervened and got people together in a room to talk about the issues?
That might be the case. We can acknowledge the progress that has been made and we should welcome it.
As I told the committee we would do, the Scottish Government has engaged in discussions about the capitalisation scheme. That scheme is now in place and, subject to a short consultation about the details, the invitation is there for local authorities to make their propositions. I cannot confirm today the total figure that will come forward, but we have agreed a framework for the scheme with HM Treasury. The councils will be invited to submit their applications, which will have to be business cases that stand up to proper and full scrutiny. That is the test that HM Treasury expects us to carry out and, for once in my life, I do not think that that is an unreasonable proposition for HM Treasury to advance. The Treasury has said that there will be a cap on the scheme, but that will be dependent on the contents of the individual propositions that are made. I will be delighted to advise Parliament in due course about progress on that.
Will the cabinet secretary give way again?
If Mr Whitton will forgive me, I would like to make progress, to respond to other points that have been raised.
There has been a contradiction. Mr Brown—he is being mentioned all the time, which shows how influential his contributions are in the chamber—tried to reconcile points that Margaret Mitchell raised with the Conservatives' usual position. She got into the unusual position for her of, in essence, encouraging the Government to direct local authorities and to intervene in their legitimate activities. Local authorities have duties as independent units of government. They have a duty in relation to equalities impact and a responsibility in relation to financial accountability. It is for the authorities, not me, to exercise those. It is unusual for the Conservatives to say that the Government should intervene in those circumstances.
Does the cabinet secretary acknowledge that the scale of the problem, which the delays are increasing, makes the issue exceptional? That is why we say that he should intervene and take a hands-on approach to resolve the issue.
That is a point that Margaret Mitchell can advance. Progress has been made and most local authorities have a scheme in place. Of course, there are outstanding cases that have to be resolved. Mr Brown is probably aware of the response to the report that was sent to Mr McNeil, as convener of the committee, by Councillor Michael Cook on behalf of COSLA. On the resolution of outstanding cases, he stated:
"Each case has to be judged on its own merits and only individual councils can make this judgement … I am sure that you would expect councils' stewardship of the public pound to be managed as efficiently and effectively as possible. I will undertake however to write to all councils suggesting that if there are claims which are particularly meritorious, then early consideration should be given to reaching a settlement."
None of us wants local authorities to part with money to resolve cases when that is inappropriate. However, when it is appropriate, early resolution will be beneficial.
The other speech to which I will refer is Tricia Marwick's. It was one of the finest contributions to the debate, as it got to the nub of some of the problem. Some people are manipulating the issue at the expense of low-paid workers to try to secure financial return. Tricia Marwick marshalled a devastating indictment of how that is being done in the name of no win, no fee, which in many other circumstances is an entirely legitimate legal process. We must guard against falling into the trap into which many of the constituents to whom she referred have fallen. Members of the local authority workforce who are trying to resolve the issues have taken that step in good faith, but now find themselves trapped by a particularly unsavoury arrangement.
I have heard clearly the desire of members from across the political spectrum for the Government to consider what further facilitation it can undertake to try to resolve the issues. I have considered that and I responded to the Local Government and Communities Committee's report formally. In the light of the debate, I will consider the issue further to determine whether the Government could do more to try to resolve the questions. However, I apply certain caveats. First, what we do will not question the responsibility of individual local authorities to resolve the issues, which are practically, politically and by statute their responsibility. Secondly, the Government's approach will have to be mindful of the practices that Tricia Marwick exposed, which without doubt compromise the situation and make it more difficult to resolve the issues, which I acknowledge are significant. At the heart of the matter, the Government's view is that any further intervention will be undertaken with the precise interest of trying to resolve the issues for low-paid workers. That is the test that we will apply. I assure Parliament that, if the Government can make an intervention to try to resolve the issues, I will consider that actively and inform Parliament of any change of course on which the Government decides.
I thank members for all the positive contributions that have been made to this important discussion. As the convener of the Local Government and Communities Committee did, I thank everyone who gave evidence to the committee during its inquiry. I also thank the committee members for their contribution, the committee clerks for all their hard work and the staff of SPICe for their dedication and invaluable assistance.
The committee wants its report to help to find resolutions to the many outstanding equal pay cases in Scottish local government. As members have observed, the inquiry was the third time that a parliamentary committee had considered the issue. The committee wants to ensure that no further inquiries into the issue are needed. A fairer distribution of wealth is key to economic growth and equal pay is an important part of that. As many members have said, equal pay in local authorities is an historical issue going back many years. Although it continues to pose a challenge for councils, it must be resolved without further undue delay. I hope that the report will help in that process. It suggests solutions to several of the issues.
The committee received evidence from all the main stakeholders in local government pay and rights issues—local authorities, COSLA, trade unions and lawyers. Unfortunately, it was clear that trust no longer seems to be part of the process. I hope that the committee's recommendations on working together go some way to helping to restore some of that lost trust.
As members know, the single status agreement between local authorities and unions was made in 1999, to harmonise manual and non-manual workers' terms and conditions. Each local authority had to implement it individually, but to date not all of them have done so. In the intervening period, several legal rulings have impacted on equal pay. Together with the delays, those have led to a large number of individual employees lodging equal pay cases with employment tribunals. The committee did not seek to completely reopen the discussions about the reasons for those lengthy delays, particularly given that the Finance Committee in the second session of Parliament covered that in a report on the same subject. However, about 35,000 equal pay claims have been lodged with employment tribunals, the number has increased considerably since the Finance Committee published its report.
I will mention a number of observations that were made to the committee on the situation that local authorities currently face. The first is that it might have been better if equal pay had been implemented nationally rather than leaving it to 32 local authorities. The second is that such a long time has passed that there have been court rulings and changes to the law that have had an impact. The final one is that the issues could have been resolved in what was a time of financial growth.
The committee made a number of recommendations relevant to that in its report. The first is that the Scottish Government could facilitate further talks between all the relevant parties: local authorities, COSLA, trade unions and lawyers. There are strong cases in the system, in which the main issue might not be over whether discrimination has occurred but over the level of compensation; the committee was of the view that those cases should be settled without further delay. Discussions should also focus on whether there could be staged payments to ease the financial burden on local authorities, although it is also worth noting that the Scottish Government is investing record levels of funding in local government.
Work should now be done to help to prevent more cases from arising in the future, for example by having an independent assessment of local authority pay and grading arrangements and annual equal pay audits in local authorities. The committee has sought clarification from the Scottish Government and others on the timescale for and operation of any scheme to help local authorities to meet their equal pay liabilities. The cabinet secretary has said that he is in negotiation with the Treasury in that regard.
I will refer to and thank several speakers—in fact, given my innate politeness, probably all of them. The cabinet secretary recognised the problems and said that borrowing in itself might not be the solution. We await with interest the outcomes of his negotiations with the Treasury.
David Whitton rightly reminded us of the important principle of equal pay and why it should exercise us in the first place. David McLetchie's forensic skills were not lost on the committee and they came to the fore again today in his reference to the Bainbridge decision and other related implications. In a Freudian slip, he also sought 37 council settlements for the benefit of the people of Edinburgh.
Jim Tolson spoke about the level of outstanding compensation and the dangers in the current litigious atmosphere. John Wilson referred to the failure to settle early in the process and the consequences of that with which we are now living. Sarah Boyack referred to pay audits and the need to measure the progress of any future solution. Margaret Mitchell highlighted the problems with using taxpayers' money to defend the legal claims of litigants.
As others have mentioned, Tricia Marwick spoke powerfully first about the problem of justice delayed being justice denied and then about the hazards of certain no-win, no-fee lawyers for people who are often in straitened circumstances. Mary Mulligan reminded us of the need to avoid prevarication on the matter and of the scope for Government and councils to work together. Jeremy Purvis referred to on-going liability and the implications for councils' budgets.
Michael McMahon cited the outstanding problem of home care workers as a concrete example of inequality. Bob Doris mentioned the sheer scale of tribunal claims and the urgency with which local authorities need to deal with them. He also mentioned that COSLA could have dealt with such claims on a national basis.
Marlyn Glen gave more detail on the capitalisation issue. Alison McInnes summarised much in the report and referred to the need to monitor equality proofing in future. Gavin Brown mentioned the unresolved issues to do with the Scottish Government's potential role as a facilitator. David Whitton wondered what some people in local government do for a living and left each of us to wonder who he might be thinking of. He also said that no-brainer cases need to be dealt with quickly.
The committee does not want just to publish its report; it wants to speak about equal pay in Parliament and continue to discuss the issue, which it does not consider to be closed. We have come up with potential solutions in our report and we will keep monitoring the progress that we hope will be made towards them. I commend the committee's report to Parliament.