Judge-led inquiry to probe equal pay liability at Birmingham City Council

A judge-led inquiry is to be commissioned to determine the causes of how the equal pay liability has continued to grow at Birmingham City Council since 2012.

The inquiry is also set to look at who is accountable for the continued increase in the council’s liability when it begins in the Spring of 2024 - taking into account that the local authority has already paid out in the region of £1bn over the last 11 years.

The announcement was made amid a series of actions the council has outlined it is taking in relation to its equal pay liability that is currently estimated at up to £760m and increasing - with the council saying this is ‘unsustainable’. The actions on governance and organisation are also set to address the problems with the implementation of an IT system affecting payments, data management and background checks called Oracle ERP.

In a statement released on Wednesday afternoon (July 5) the council said mandatory spending restrictions will be implemented and non-essential spending will cease with immediate effect. The council also said that it will strengthen its strategic capability and capacity by appointing three Strategic Expert Advisers to support the Council’s Directors and Cabinet in the following areas:

1. Industrial relations
2. Financial resilience
3. Risk management
4. Good governance, culture change and service Improvement
5. Digital and Strategic IT implementation

In addition it stated that it will formally commission an independent Governance Review (in collaboration with the Department for Levelling-Up, Housing and Communities) this week, to focus upon areas including the Oracle implementation and Equal Pay.

Alongside the Governance Review the Council has commissioned an Independently Chaired, Internal Management Review to ascertain the root causes of the failure to effectively implement Oracle.

What the leaders of Birmingham City Council have said about measures to tackle equal pay liability in their own words

Birmingham City Council leader Cllr John Cotton said: “I’ve been clear from day one that I will take whatever action is needed to address the substantial challenges facing the council and these measures are essential to grip the situation - particularly in terms of financial controls, organisational capacity and improved governance. We will be open and transparent throughout this process and the independent reviews and judge-led inquiry will ensure that there is proper accountability for these failings.”

Birmingham City Council deputy leader Cllr Sharon Thompson added: “This is one of the biggest challenges this council has ever faced, and we must understand how the issues have arisen to prevent a repeat in the future. Given the scale of this challenge, we must impose mandatory spending restrictions. But as we have done throughout the cost-of-living crisis, we will continue to focus on tackling social injustice and inequality across our city. We will do everything we can to protect the services our residents rely on.”