A historic agreement between Birmingham City Council and two unions to settle equal pay claims has been approved – but there are warnings the authority still has several hurdles to cross.

The equal pay issue was one of many factors which contributed to a perfect storm which engulfed the authority as it declared effective bankruptcy last September.

The past year in Birmingham has been marked by an enormous and alarming wave of proposed cuts to local services, triggering dismay and anger across the city.

However, in an update issued last week, the Labour-run council, UNISON and GMB announced they had reached a ‘framework agreement’ to settle the claims.

They were brought by the two unions on behalf of members working for the local authority and Birmingham Children’s Trust.

GMB said that around 6,000 predominantly women workers now look set to finally receive settlement payments four years after launching their campaign.

The framework agreement was formally approved at a cabinet meeting today, December 17, with leader John Cotton describing it a “significant step in the right direction”.

However, he continued: “While this framework agreement represents an important stage in this council’s recovery, there will be absolutely no complacency about the journey that we still need to travel.

“This council faces unprecedented challenges, we must build on the progress we’ve made over the last 12 months.”

Cllr Rob Pocock, who is overseeing the council’s recovery, echoed a similar message during the meeting, saying: “This is a major milestone, it’s a really big stride forward in this council’s journey to recovery.

“There are, however, a lot more hurdles to cross.”

He pointed to issues that still need addressing when it comes to equal pay, including implementing a new pay and grading scheme; ending irregular working practices; and introducing a new employment contract.

“These are major projects still to be delivered,” he said.

“I think we have a team here strong, confident and capable of taking the next steps to finally resolve this issue.”

Robert Alden, leader of the Conservatives at the council, warned the Labour administration at the authority there is still a “long way” to go.

“There are significant other steps that still need to happen,” he said.

Meanwhile the leader of the Liberal Democrats at the council, Roger Harmer, reacted to the agreement by saying:  “The impact of settling this, whatever figure it ends up being, is on this administration.

“The impact of cuts of services or the sale of assets […] are on this administration.”

Cllr Cotton responded by saying: “I think I’ve been absolutely clear […] that we take responsibility for the issues that we need to resolve here in this city.

“This report is a step forward in ensuring we finally bring this sorry chapter to a close.”

Following the announcement of the agreement last week, Cllr Cotton told the Local Democracy Reporting Service: “It’s about how we’re ensuring we’re building strong, constructive industrial relationships going forward.

“So it’s an incredibly important moment for the city council and for the services people in this city receive”.

Cllr Cotton, who became leader in 2023, also addressed why the equal pay saga had rumbled on for so long. “I was brought in as leader to fix a number of long-standing challenges facing this council,” he said.

“That’s what I’ve been focused on since taking on that role in May of last year.

“We’ve had to engage in a whole series of really difficult decisions over the last 18 months and some really in-depth discussions in order to go forward on a number of issues, including the agreement around equal pay.”

Alice Reynolds, GMB Organiser, said last week that the women of Birmingham City Council had delivered a “historic outcome”.

“This agreement would not have happened without the determination shown by low paid women workers,” she said.

“In schools, offices and workplaces across our city, GMB members have led the fight for equal pay. Now this framework agreement sets out a cast iron plan to settle our members’ claims.”

Cabinet member Nicky Brennan added during today’s meeting: “For far too long, women in this organisation have been fighting for change.

“I’m hopeful that this settlement agreement marks the beginning of a continuous effort for us as leaders to right the wrongs of the past.”

The full terms of the settlement are confidential. However, the council says the cost of the settlement falls within the limit of the exceptional financial support (EFS) package agreed with the previous government in January 2024.

It adds that the council and the unions are committed to ensuring that all staff are treated fairly and paid equally.