‘Serious concerns’ over Glasgow City Council finances because of equal pay claims

Glasgow City Council could face crippling equal pay claims that would lead to “unprecedented financial pressures”, a spending watchdog has warned.

In a new report the Accounts Commission says Scotland’s biggest local authority faces “a unique set of challenges” compared to other councils and could impact on services.

A number of local authorities have faced legal challenges from women who have been paid less than men doing the equivalent job, and in Glasgow it is thought the payout may be as much as £500m.

The Accounts Commission noted the council had achieved savings of more than £100m in the last two years but faces a funding gap of almost £130m.

After the SNP won control of the city from Labour last year it promised to reach a settlement with thousands of women over equal pay.

The scale of resolving equal pay claims is likely to be significant and would be unlikely to be bridged by traditional funding options such as the use of existing reserves or selling assets, says the report.

Graham Sharp, chair of the Accounts Commission, said: "The scale and complexity of Glasgow's socio-economic challenges are unique in Scotland and, like all local authorities, it's facing considerable financial pressures.

"The council has made steady progress since our last report and has a good track record in making savings, but we are seriously concerned about the impact that resolving equal pay claims could have on how the council delivers public services, and we will be continuing to take a close interest in that issue." 

Council leader Susan Aitken said: "The challenge of resolving equal pay is substantial and it would be unusual if it wasn't a focus for the audit team.

"However, it is a challenge we are committed to deal with and we are making substantial progress."