Birmingham City Council: Equal pay decision delay prompts more warnings

New emergency finance warnings have been issued by Birmingham City Council officials over a delay to deal with its equal pay liabilities.

Commissioners will start work on 26 September, the council's leader said.

As a result, a meeting to take a "hugely significant" decision on equal pay is delayed, added John Cotton.

The authority is facing the prospect of a £760m bill to settle equal pay claims which is increasing by £5m to £14m each month.

The delay has prompted council officers to issue an additional section 114 notice warning that the delay would lead to further mounting liabilities.

The council's chief legal officer has also issued a separate section 5 notice, flagging that the authority' position could be legally problematic.

The meeting of the council's business management committee, set to discuss how to resolve the issue of equal pay, has been put back to 28 September, said Mr Cotton.

"In my view this is simple common sense, as it would no longer be appropriate for the committee to make such a consequential decision without the commissioners having had the opportunity to examine the options and inform the committee of their view," he said, adding that he was "disappointed" by the issuing of the new financial warnings.

The council has already paid out more than £1bn in compensation to underpaid workers.

The settling of claims in 2012 followed a court ruling that found hundreds of mostly female employees, working in roles such as teaching assistants, cleaners and catering positions, missed out on bonuses given to staff in traditionally male-dominated roles, such as refuse collectors and street cleaners.

The introduction of a new IT system, which has come under fire, has also seen expected costs spiral from £19m to £100m.

Analysis - Elizabeth Glinka, BBC Midlands Political Editor

This news was broken not via the council's press office but in a statement on the local Labour Group's X/Twitter account.

The statement from Mr Cotton shows his determination to stay ahead of the story on this occasion and also demonstrates the extent to which relations between councillors and senior officers have become strained.

In a previous statement, he raised concerns about "senior capacity" and again he makes it clear he believes the intervention of government-appointed commissioners is needed, something the authority's chief executive Deborah Cadman had said to staff she had hoped to avoid.

There is no getting away from the fact the issuing of these notices is embarrassing. Already effectively bankrupt, Birmingham is now confirming that it currently has no plan to stem its liability on equal pay, and the £760m bill we've so often heard quoted is set to rise.

The council currently doesn't have a way forward and officers are now saying the situation as it stands is so problematic and legally dangerous they had to make the government aware.

There have been calls for the council to urgently sell off assets, including land and its stake in Birmingham Airport, in order to raise cash.

BBC Midlands Political Editor Elizabeth Glinka said there might also be outsourcing of major divisions and services within the council, such as bin collections.