The chief executive of Birmingham City Council has issued a "we feel your pain" plea to thousands of local authority workers facing wage cuts in a controversial pay and grading review.

Stephen Hughes said he was not indifferent to the fate of almost 5,000 staff who will lose money under the shake-up, adding: "I absolutely understand how hard this is hitting them."

Mr Hughes revealed a number of initiatives under way to reduce the number of workers facing wage reductions.

He said that by April 2010, the end of a three-year pay protection period, only about 3.5 per cent of the 41,000 workforce could expect to have their pay cut - down from a seven per cent forecast earlier this year.

His comments came as it was announced that Birmingham City Council has for the first time been awarded a three-star ranking in the Audit Commission's annual Comprehensive Performance Assessment of service delivery. Inspectors praised services which are now consistently above minimum requirements.

Four years ago, the council was classified as weak and social services and housing were deemed to be failing.

Talks are continuing in an attempt to end industrial action by the council unions over the pay and grading dispute.

Thousands of employees across all departments staged a 24-hour strike on Tuesday and it is believed further stoppages are planned.

Mr Hughes said efforts to mitigate the impact on individual employees included offering training courses so that people could move around the organisation and qualify for higher-skilled and higher paid jobs.

"We are working very hard to sort this out. If we haven't got the message over to all our staff, then we have to work harder.

"The intention is to protect as many staff as we possibly can," he added.