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'Desperation' to avoid binmen strikes sent Birmingham council equal pay bill soaring to £890m

Retiring chief executive Stephen Hughes says nobody could have predicted scale of the claims - and city was hit by no-win, no-fee lawyers

Stephen Hughes
Stephen Hughes

Birmingham City Council’s desperation to avoid prolonged strike action by binmen contributed to the £890 million ‘equal pay’ bill racked up over the last decade.

That is the view of chief executive Stephen Hughes, who has announced he is to retire from the £205,000 job as head of Britain’s largest local authority in February next year.

The equal pay claims, which came after legal changes in 1999 allowed workers in female dominated jobs like cooks and caterers, care workers and cleaners to claim equal pay to counterparts in ‘male’ roles like road workers, bin men and street sweepers, could end up costing the council £1 billion after all the claims come through.

The issue has been a major blight on the city council and hit the bank balance hard at a time when it is already reeling from the biggest spending cuts in local government history.

But Mr Hughes said that no-one could have predicted the scale of the claims. “Hindsight is a really wonderful thing. The fatal decisions were made around the late 1990s, that was the point the pay systems should have been reviewed and changed.”

He said that Birmingham’s size made it ripe for challenges from the no-win-no-fee lawyers who could process thousands of individual claims in one go.

“As the biggest council what we had was open to greater scrutiny. And as we reviewed it the law kept changing and we kept getting bigger and bigger damages. We should have started earlier, should have been more robust in the changes we made.”

But the problem was compounded because certain bonuses were maintained after a two-day strike in 2008, to prevent further industrial action.

Mr Hughes said: “That was one of the issues we faced as an organisation. The consequences of having a big, long, sustained strike from refuse collection is deep in the psyche from 1979. No one wanted a return to that. Averting strike action loomed large in our minds.”

He argues that on whole his tenure has been a successful one, overseeing the business transformation efficiency drive, improving satisfaction rates among citizens and working on major projects like the Birmingham Airport Runway Extension, the Energy Savers scheme, council house renovation and the Library of Birmingham.

His departure is to be accompanied by a major overhaul of senior staff, with two of the six senior manager roles cut delivering an saving of £500,000 a year.

 

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