Equality (Race and Disability) Bill: mandatory ethnicity and disability pay gap reporting consultation – LGA response

Agree: of the local authorities who engaged with us, overall there was support for reporting on ethnicity and disability pay gaps for reasons of transparency, accountability and ability to drive action. More widely, local authorities will have differing views on whether large employers should have to report and some disagree.

29 per cent of those employers responding to our survey currently report on their ethnicity pay gap (of these all were councils except for one fire and rescue service).  

Where data on pay in relation to ethnic minorities is available, it shows that Black, African, Caribbean or Black British employees employed in the UK across all sectors earned less gross hourly pay than White employees, a position which has remained the same since 2012. UK-born White employees earn more on average than most ethnic minority employees.

More transparency in this area can help to change behaviours and support trust, engagement and accountability, all vital for more inclusive workplaces. Research undertaken in relation to race in the workplace found that, 'a strong commitment to inclusion and fairness at work is not only good for business and their ability to attract and retain the diversity of talent, experience, and skills they need to thrive, but also for our economies and societies' (The McGregor Smith Review, 2017).

It should be noted, however, that there are already resourcing issues within local authority teams, and with the additional burdens of this reporting at the same time as the introduction of provisions of the Employment Rights Bill and local government reorganisation, local authority HR provision will be under enormous pressure. The most recent Local Government Workforce Survey (2024/25) confirm that the majority of councils’ resources had either stayed the same or decreased over the last three years. The LGA is concerned that the introduction of mandatory reporting could create a significant additional burden where councils do not have the resources and funding to take on any extra duties. This is both in relation to the creation of the reports themselves (gathering and analysing data and ensuring its accuracy) and in relation to bringing about positive change through implementing action plans.

Agree: of the local authorities who engaged with us, overall there was support for reporting on ethnicity and disability pay gaps for reasons of transparency, accountability and ability to drive action. More widely, local authorities will have differing views on whether large employers should have to report and some disagree.

22 per cent of those employers responding to our survey currently report on their disability pay gap (of these all were councils, except for one fire and rescue service). Transparency in this area is important for the same reasons as for ethnicity. In relation to disability specifically, it will open up the conversation about disability to include those workers and employees who have non-visible disabilities. In the UK, it is estimated that there are around 16 million people (24 per cent of the population) living with disabilities, and around 80 per cent of those are thought to have non-visible disabilities, such as asthma, cancer, cardiac issues, chronic pain, hearing loss and deafness, diabetes, HIV or psychological health conditions, such as anxiety and depression, and neurodiverse conditions such as autism and ADHD.  

This will also, potentially, help to tackle issues such as the disability employment gap (higher rates of unemployment among people with disabilities) and higher redundancy rates for people with disabilities. Greater transparency will help to remove barriers and challenge bias in working practices and environments to ensure that people with disabilities are not at a disadvantage and will build psychological safety to support people with disabilities to speak more openly about what helps them to be successful at work.  

It should be noted, however, that there are already resourcing issues within local authority teams, and with the additional burdens of this reporting at the same time as the introduction of provisions of the Employment Rights Bill and local government reorganisation, local authority HR provision will be under enormous pressure. The most recent Local Government Workforce Survey (2024/25) confirm that the majority of councils’ resources had either stayed the same or decreased over the last three years. The LGA is concerned that the introduction of mandatory reporting could create a significant additional burden where councils do not have the resources and funding to take on any extra duties. This is both in relation to the creation of the reports themselves (gathering and analysing data and ensuring its accuracy) and in relation to bringing about positive change through implementing action plans. 

Agree: it would be appropriate for the geographical scope for other pay gap reporting to be the same as existing pay gap reporting in order for meaningful comparisons to be made.

Agree: as above, it would be appropriate for the geographical scope for other pay gap reporting to be the same as existing pay gap reporting in order for meaningful comparisons to be made.

Agree: 68 per cent of employers who responded to our survey think that the ethnicity and disability pay gap reporting should mirror the current gender pay gap reporting requirements. Most agreed because the systems are already in place for gender pay gap reporting on this basis and for consistency. 

Agree: as above, our survey showed that 68 per cent of responding employers that responded think that the ethnicity and disability pay gap reporting should mirror the current gender pay gap reporting requirements. Most agreed because the systems are already in place for gender pay gap reporting on this basis and for consistency.

Agree: the majority (75 per cent) of employers who responded to our survey agreed that large employers should have to report on the ethnic and disability status breakdown of their workforce. Those who disagreed (24 per cent) are concerned that their overall lack of data could make these figures inaccurate, alongside concerns regarding how to address disclosure in respect of ethnic origin and disability status, both protected characteristics and special category data under UK GDPR.  

However, the clear majority of employers who responded agree with this proposal and some are already voluntarily reporting this data on an annual basis and many stating that this data would help to put pay gap reports into context. 

Agree: as above, in our survey, the majority (75 per cent) of employers agreed that large employers should have to report on the ethnic and disability status breakdown of their workforce. Those who disagreed (24 per cent) are concerned that overall lack of data would make these figures inaccurate, alongside concerns regarding how to address disclosure in respect of ethnic origin or disability status, both protected characteristics and special category data under UK GDPR.  

However, the clear majority of the employers agree with this proposal; some are already reporting this data voluntarily on an annual basis and many stating that this data would help to put pay gap reports into context.

Agree: in our survey, the overwhelming majority (over 90 per cent) of employers agreed with this proposal, with the following comments:

“There will be many staff who don't feel comfortable disclosing this information, so it's important that this is mirrored in reporting.”  

“This will enable organisations to see how, as they increase their proportion of completed data, how this skewed information. It can also act as an incentive for employees to complete their data, when they see how it is being used.”  

“Gives context of how many are 'missing' or excluded from the report and gives better understanding of the data.”  

“This would give a good indication of the reliability of the figures that are being produced. Without this the figures could potentially be misinterpreted.”. 

Agree: as above, in our survey, the overwhelming majority (over 90 per cent) of employers agreed with this proposal, with the following comments:

“There will be many staff who don't feel comfortable disclosing this information, so it's important that this is mirrored in reporting.”  

“This will enable organisations to see how, as they increase their proportion of completed data, how this skewed information. It can also act as an incentive for employees to complete their data, when they see how it is being used.”  

“Gives context of how many are 'missing' or excluded from the report and gives better understanding of the data.”  

“This would give a good indication of the reliability of the figures that are being produced. Without this the figures could potentially be misinterpreted.”.

Agree: our current, and previous, discussions with local authorities have confirmed to us that local authorities generally favour the action plan approach, including timescales for delivery, case studies and best practice, to support the drive for change in the organisation.

In the current survey, 62.5 per cent of employers agreed with this proposal and 11 per cent had already produced either a disability or an ethnicity pay gap action plan.

Of those in favour, the following comments were received:

"Not all employers will necessarily need to produce an action plan but, for those who do, it will mandate the employer to take the results seriously."

"Without meaningful action plans the gaps will not close"  

"Will help employees as it will allow them to understand the actions that their employer is taking and to hold their employer to account"

"What is the point in pulling data if you are doing nothing about it" 

"It adds a level of accountability to the reporting of the figures"

"Highlights the journey taken by the organisation, enables sharing of good practice and promotes employer’s initiatives and future aspirations for achievement."

Where employers did not agree on action plans, their reasons included: wanting to be more focused on their annual Workforce Equalities report (a statutory report); that it should be an employer's choice whether to produce a plan or not; the difficulties in recruiting a diverse workforce in certain areas; and that a simple explanation of pay gaps should be sufficient – a 'one size fits all' approach won't work for all employers. 

Agree: as above, our current survey, and previous discussions has confirmed to us that some local authorities favour the action plan approach, including timescales for delivery, case studies and best practice, to support the drive for change in the organisation.  

In the current survey, 62.5 per cent of employers agreed with this proposal and 11 per cent had already produced either a disability or an ethnicity pay gap action plan.

Of those in favour, the following comments were received:

"Not all employers will necessarily need to produce an action plan but, for those who do, it will mandate the employer take the results seriously."

"Without meaningful action plans the gaps will not close"  

"Will help employees as it will allow them to understand the actions that their employer is taking and to hold their employer to account"  

"What is the point in pulling data if you are doing nothing about it" 

"It adds a level of accountability to the reporting of the figures"

"Highlights the journey taken by the organisation, enables sharing of good practice and promotes employer's initiatives and future aspirations for achievement."  

Where employers did not agree on action plans, their reasons included wanting to be more focused on their annual Workforce Equalities report (a statutory report), that it should be an employer's choice, the difficulties in recruiting a diverse workforce and a simple explanation of pay gaps should be sufficient – a 'one size fits all' approach won't work for all employers.

Disagree: whilst this proposal was supported by a significant minority of those employers surveyed (40 per cent) on the basis that it would highlight barriers to career progression, the majority of employers disagreed with this proposal.  The reporting burden on public bodies, and in particular local government, is already very high and this would add a significant additional layer or reporting. Given the demographic profile of the workforce in many councils, this more detailed level of reporting could, potentially, either leave staff feeling exposed or make reporting impossible.

To require employers to implement new duties to report on disability and / or ethnicity pay gaps will be a significant shift in and of itself, at a time when there are other considerable organisational pressures on them. Councils are already working through the introduction of elements of the Employment Rights Bill, local government reorganisation and devolution. Our preference would be for there to be some delay in introducing additional reporting requirements.

Of those we surveyed, 58 per cent of employers in our survey disagreed with this proposal based on concerns including lack of data and that the approach of using grade / salary bands would be problematic. It was noted by several employers, that as there is a lack of a common grading structure across the local government sector, this would make it much harder to draw meaningful comparison across employers. Employers noted that reporting based on quartiles would enable more meaningful comparisons to be drawn and progress to be noted.

Disagree: as above, whilst the intention is positive in relation to this additional reporting and a significant minority of those employers surveyed (44 per cent) agreed with it on the basis that it would highlight barriers to career progression, our position is that the reporting burden on public bodies, in particular on local government, is already high.  

A smaller majority 54 per cent of employers in our survey disagreed with these proposals based on issues such as lack of data, the significant costs and resourcing needed to record, monitor and track this information, and the difficulty of not having HR systems in place currently which track career progression.  

To require employers to go from not reporting on disability and ethnicity pay gaps to doing so will in itself be a significant shift, at a time when there are other considerable organisational pressures on them, including the introduction of elements of the Employment Rights Bill and local government reorganisation. If this extra public body requirement were to be introduced, our preference would be for there to be some delay in introducing this additional reporting requirement.

As an alternative to this being introduced as a statutory proposal in and of itself, consideration of these elements could be highlighted in guidance on preparing pay gap action plans. Employers responding to our survey also expressed concerns about ensuring anonymity in recruitment processes (e.g. in application forms) so if this proposal is introduced it would need to be very careful guidance about collection and processing of this data.  

A number of employers that agreed with the proposal told us that they already produce reports along these lines, that it gives a greater understanding of the workforce and that this should also be reported on for gender, which is not the case at present. We propose that reporting on recruitment, retention and progression would remain voluntary and would sit within action plan guidance.

Consideration of recruitment, retention and progression should form part of action plans rather than being a reporting point in and of itself.

Disagree: as above, whilst the intention is positive in relation to this additional reporting and a significant minority of those employers surveyed (44 per cent) agreed with it on the basis that it would highlight barriers to career progression, our position is that the reporting burden on public bodies, in particular on local government, is already high.

To require them to go from not reporting on disability and / or ethnicity pay gaps to doing so will be a significant shift, at a time when there are other considerable organisational pressures on them, for example the introduction of elements of the Employment Rights Bill and local government reorganisation. Our preference would be for there to be some delay in introducing this additional reporting requirement.

A smaller majority 54 per cent of employers in our survey disagreed with the proposal, based on issues such as lack of data, the costs and resourcing needed to record, monitor and track this information and the difficulty of not having HR systems in place currently which track career progression.  

A number of employers that agreed with the proposal told us that they already produce reports along these lines, that it gives a greater understanding of the workforce and that this should also be reported on for gender, which is not the case at present.

Disagree: as above, whilst the intention is positive in relation to this additional reporting and a significant minority of those employers surveyed (44 per cent) agreed with it on the basis that it would highlight barriers to career progression, our position is that the reporting burden on public bodies, in particular on local government, is already high.

To require them to go from not reporting on disability and / or ethnicity pay gaps to doing so will be a significant shift, at a time when there are other considerable organisational pressures on them, for example the introduction of elements of the Employment Rights Bill and local government reorganisation. Our preference would be for there to be some delay in introducing this additional reporting requirement.

A smaller majority 54 per cent of employers in our survey disagreed with the proposal, based on issues such as lack of data, the costs and resourcing needed to record, monitor and track this information and the difficulty of not having HR systems in place currently which track career progression.  

A number of employers that agreed with the proposal told us that they already produce reports along these lines, that it gives a greater understanding of the workforce and that this should also be reported on for gender, which is not the case at present

As stated above in respect of ethnicity, consideration of recruitment, retention and progression should form part of action plans rather than being a reporting point in and of itself. 

Agree: to maintain consistency of approach and build on existing processes and experiences of those reporting on pay gaps, it would seem appropriate for these dates to be the same as for gender pay gap reporting.

Agree: as above, to maintain consistency of approach and build on existing processes and experiences of those reporting on pay gaps, it would seem appropriate for these dates to be the same as for gender pay gap reporting. 

Agree: to maintain consistency of approach and build on existing processes and experiences of those reporting on pay gaps, it would seem appropriate for the online reporting to be the same as for gender pay gap reporting.

Agree: as above, to maintain consistency of approach and build on existing processes and experiences of those reporting on pay gaps, it would seem appropriate for the online reporting to be the same as for gender pay gap reporting. 

We do not have a view on this element of the consultation.

We do not have a view on this element of the consultation.

Agree: discussions with local authorities indicate to us that they consider these to be the most appropriate questions and categories available at present, with 71 per cent of those employers responding to our survey who currently report on their ethnicity pay gap already using these standards.

 Agree: our survey showed that 75 per cent agree with this on the basis that it would enable some reporting even with limited numbers and would allow for benchmarking against other employers. Others felt that this is a reasonable line and should be easier to achieve.  

However, among both those who agreed and those who disagreed, there were concerns that this might be simplistic and lack nuance. There are concerns as to how it can fairly reflect the experience of different groups. Some disagreed as they felt that even binary reporting would be bureaucratic and unnecessary.  

Overall, any such reporting would be an improvement on none at this stage and in order to ensure a balanced burden on employers at the outset, we would be in support of the binary classification as a minimum, with those who wanted to go further being able to do so voluntarily. 

 Agree: 87 per cent of employers in our survey agreed with this proposal saying that this would protect confidentiality. Some respondents who disagreed as well as some who agreed, said that the minimum should be higher than 10.  

Our view is that 10 is an appropriate starting point for most employers, and protection of employee confidentiality should be maintained at this level. Employers have expressed some concerns about how to report where there are fewer than 10 non-white employees and additional consideration and guidance needs to be given as to how to handle this situation to ensure confidentiality is protected.

Agree: discussions with local authorities indicate to us that they consider this to be the most appropriate guidance available at present. 

The employers in response to our survey raised the following in relation to both disability and ethnicity pay gap reporting: 

Provision of pragmatic Government guidance which recognises the administrative burden on organisations and supports communications and messaging to staff as well once this becomes mandatory in order to enable the public to understand the context of the reporting

The role of senior management and leadership both in terms of allocating sufficient staff time and resourcing, and providing confidence to staff to share potentially sensitive information

It is clear from our discussions that the local government sector will need additional, sufficient resourcing to fund the necessary work of obtaining the information, analysing and reporting on that data. Being able to implement meaningful and sustainable action plans to make the necessary improvements will require significant investments in many authorities.  

Agree: for the purpose of starting pay gap reporting in this area, a binary approach would seem most appropriate and is supported by the fact that of those who currently voluntarily report their disability pay gap data, 82 per cent use this approach. 

In our survey, 81 per cent of employers used this definition of 'disability'. There was also recognition that there are likely to be shortcomings in this area due to people self-defining themselves which would be inherent whatever definition was used.

Agree: for similar reasons as in the case of ethnicity reporting, local authorities consider that protection of employee confidentiality is paramount in respect of this special category data and the threshold of 10 seems appropriate to maintain that. 

As above, the employers in response to our survey raised the following in relation to both disability and ethnicity pay gap reporting: 

Provision of pragmatic Government guidance which recognises the administrative burden on organisations and supports communications and messaging to staff as well once this becomes mandatory in order to enable the public to understand the context of the reporting

The role of senior management and leadership both in terms of allocating sufficient staff time and resourcing, and providing confidence to staff to share potentially sensitive information

It is clear from our discussions that the local government sector will need additional, sufficient resourcing to fund the necessary work of obtaining the information, analysing and reporting on that data. Being able to implement meaningful and sustainable action plans to make the necessary improvements will require significant investments in many authorities.