The gender pay gap has reduced since mandatory reporting was introduced in 2017, changing the experience of women’s participation in work. Now the Government hopes to do the same for the ethnicity and pay gap reporting by introducing mandatory ethnicity and disability pay gap reporting. What will this mean for our local government workplaces? asks Naomi Cooke, LGA’s Head of Workforce.
Pay gaps persist for a variety of reasons, some based in cultural bias and societal assumptions about people and work, which means that addressing pay gaps can often seem like a mountain to climb for employers.
Yet progress has been made. When we look at the gender pay gap, in 1997, across the economy as a whole, the gap was 27.5 per cent and by 2024 it was 13.1 per cent for all, and seven per cent for full-time workers.
There is even better news in local government in England – from 2018/19, when mandatory reporting first began, to 2024/25 the mean gender pay gap fell from 6.1 per cent to 3.5 per cent and the median from four per cent to 1.7 per cent. Indeed, 25 councils now don’t have a gender pay gap at all. According to our latest report, there are 152 councils where men on average earn more, and 105 councils where women are on average paid more than men.
So, we see that there are things that employers can do, and are doing, to reduce the gaps and change the experience of women in their workplaces. Now the Government wants to extend this to other groups of workers.
In 2023 the disability pay gap was 12.7 per cent and for disabled men it was 15.5 per cent. Black employees currently face a 5.6 per cent pay gap and non-UK born Black employees, on average, earn 12 per cent less than white British workers.
This potentially represents a serious equality issue and a significant loss to UK productivity, playing into issues around recruitment and retention, the skills crisis, and the need for a more competitive economy.
Therefore, for the Government, the economic and moral benefits for advancing fairness by closing gaps are compelling. Enforcing greater pay transparency leads employers to examine structural or cultural barriers within their organisations that may be contributing to the pay gap and, ideally, tackle them.
What will this mean for councils?
The Government proposes to align new pay gap reporting requirements with the provisions already in place for gender pay gap reporting and so this is familiar territory for councils.
However, we expect that for some councils, analysing and publishing pay gap information for these new categories will bring challenges.
To start with, not all employees will have disclosed their ethnicity and disability status. Records will be less complete than they are for gender, but we also know that engaging early, communicating to staff what is being asked for and why, helps to fill the gaps.
Smaller councils may face particular challenges, especially in less diverse areas, to ensure individuals aren’t identifiable within pay gap reports so there will be additional considerations on how to display that data.
We know that a significant number of councils already, voluntarily analyse and publish their ethnicity pay gaps and some also publish their disability pay gap data, but they may still face some challenges with the new requirements, for example, in matching the categories of ethnicity.
However, overall councils are committed to promoting equality and inclusion within our communities – it’s a core part of what we do, underpinned by the Public Sector Equality Duty.
Local government in England employs over a million workers. We are often the largest single employer in our local areas and therefore are important to residents as both a service provider and as a local employer.
Closing pay gaps will help us to demonstrate that we are actively delivering equality and inclusion through workforce development.
Addressing pay gaps should enable councils to bring positive change in their communities. Closing pay gaps can help councils - and by extension the wider community - to ‘level up’ by ensuring that barriers to training, promotion and career development for disabled and ethnic minority staff, as well as for women, are addressed.
The LGA will be responding to the Government’s consultation on behalf of the local government sector with feedback on how we think the new pay gap requirements can best be implemented.
We will also be providing feedback to the Government’s recent call for evidence on proposals to extend equal pay rights, offer new equal pay protections during outsourcing and implement a new regulatory and enforcement unit for equal pay. To help inform our discussions with the Government on the issues in the call we would be grateful if a copy of any responses could also be sent to us at [email protected]
We’ll keep you informed of the legislation, and other equality law developments, providing advice and guidance in our monthly employment law updates. Our regular workforce newsletters will also keep you up to date on our work that will support you with other aspects of achieving equality and inclusion at work.
There are already lots of resources out there – the LGA website has information on the gender pay gap and signposting to where you can get more information and advice. The CIPD has guidance on ethnicity pay reporting that can help you to get ready for mandatory reporting.
Whilst we await the Government’s Bill, the direction of travel is clear and now’s a good time to start preparing. Look out for more information on this topic in coming months!