Posted on: 10/04/2025

Thought Leadership

Tackling the gender pay gap is strategic, not just legal. Equal pay audits help councils modernise, plan better, and lead credibly—driving smarter decisions, stronger teams, and more resilient public services.

By Rachael Simpson, Principal Consultant HR

Across the local government landscape, pay gaps persist - despite decades of equality legislation, the average gender pay gap in local authorities still hovers around 6%. This figure represents more than a compliance issue, it signals missed opportunities to build workforce resilience, enhance community trust, and strengthen public service outcomes. This isn’t just a legal risk - it's a leadership challenge, and forward-thinking councils are meeting it head-on.

The cost of ignoring the gap

Some UK local authorities have faced crippling equal pay liabilities, draining resources from frontline services. In times of financial strain, unaddressed pay inequity acts as a hidden disruptor creating unpredictable risks that undermine long-term planning.

Financial exposure and budget instability

Several UK local authorities have faced significant compensation bills due to equal pay claims, contributing significantly to the authority's ongoing financial challenges. Unaddressed pay inequities create unpredictable financial exposures that can destabilise already stretched budgets and compromise service delivery.

Talent drain and recruitment challenges

Councils already compete with private sector salaries but pay gaps further erode their ability to attract and retain top talent. Research shows: - Higher turnover among underpaid groups - Lower application rates from skilled professionals - Decreased morale due to perceptions of unfairness Each percentage point of the pay gap represents not just a moral failing but a practical barrier to attracting and retaining the talent needed for public service excellence.

Eroded public trust

In an age of transparency, the public expects local authorities to lead by example. Pay inequity undermines trust—especially when data is visible, but action is absent.Bridging the gap is not just about fairness; it's about credibility.

Bridging the Gap: The strategic value of equal pay audits

Equal pay audits generate insights that inform:

- Recruitment and retention strategy

- Workforce planning

- Skills development pathways

- Succession and progression frameworks

Used well, this data becomes a strategic asset for modern public service leadership.

Equal pay audits transform the approach to compensation equity from reactive action (addressing complaints) to proactive action (preventing disparities). This shift aligns with modern governance principles and creates space for planned, systematic improvements rather than crisis management.

Creating data-driven decision making

A robust equal pay audit goes beyond legal compliance, it generates insights that inform strategic decisions and enable councils to modernise legacy practices with evidence-based action.

• Identify structural barriers to advancement
• Detect patterns in recruitment, promotion, and retention
• Benchmark performance against peer organisations
• Track improvement over time

When properly analysed, equal pay audit data becomes a strategic asset for organisational development.

Strengthening stakeholder relationships

Open, evidence-led audits strengthen trust with:

- Staff and trade unions

- Community stakeholders

- Candidates considering careers in local government

They also send a powerful signal: we practice what we preach.

• Trade unions, by demonstrating commitment to joint values
• Employees, by building trust in pay and reward systems
• Community stakeholders, by modelling equitable practices
• Potential recruits, by signalling organisational values
  

The unique context of Local Authorities

Councils manage a uniquely diverse workforce, making job evaluation and pay benchmarking more complex—but also more important. A ‘one-size-fits-all’ approach simply won’t do.

Complex organisational structures

With diverse service areas ranging from social care to waste management, local authorities typically employ staff across a wide spectrum of roles, qualifications, and pay grades. This complexity makes comparing "like work" and "work of equal value" particularly challenging but also creates multiple opportunities to address systemic inequities.

Historical legacy issues

Many local authorities still grapple with the legacy of historical pay practices, including various allowances, market supplements, job evaluation and pay and grading reviews implemented decades ago. Equal pay audits illuminate these historical patterns and provide the evidence base for modernisation.

Budget constraints as catalysts for innovation

Rather than viewing financial constraints as barriers to equal pay, forward-thinking authorities use audit findings to drive innovation in reward strategies.

This might include:

• Flexible benefits that deliver value without increasing fixed costs
• Career development pathways that increase retention
• Transparent pay structures that reduce negotiation disparities
• Skills-based compensation approaches that transcend traditional role definitions

Best Practices: From audit to action

The most successful councils are adopting an integrated, strategic approach that links audits to organisational planning, modernisation, and inclusive service delivery.

Comprehensive data collection and analysis

Effective audits examine not just base pay but total compensation including overtime patterns, allowances, performance-related pay, and career progression rates. Advanced analytical approaches, including regression analysis, can reveal systemic issues that might otherwise remain hidden.

Collaborative engagement

Involving trade unions, employee representatives, and various stakeholders from the outset enhances the credibility of the audit process and facilitates implementation of necessary changes. This collaborative approach has proven particularly effective in local authorities with strong union representation.

Integration with broader strategic objectives

Equal pay audits deliver maximum value when integrated with:

• Workforce development strategies
• Recruitment and retention initiatives
• Digital transformation programmes
• Service delivery improvements
• Overall financial planning

Regular monitoring and transparent reporting

Leading authorities establish ongoing monitoring systems that track key metrics between formal audits, allowing for early intervention when patterns emerge. They also communicate findings and action plans transparently, using the audit process to demonstrate commitment to continuous improvement.

Mind the Gap, Close the Gap, Bridge the Gap

Equal pay audits are no longer a tick-box exercise - they’re a cornerstone of strategic workforce leadership.

By embedding them into regular practice, councils can:

- Protect financial stability

- Build inclusive, future-ready teams

- Strengthen community trust

- Align internal practice with public service values

The most resilient local authorities treat audits not as a retrospective fix—but as a forward-looking investment in their people, their culture, and their capacity to serve. The most successful local authorities view equal pay audits not as retrospective checks but as forward-looking strategic processes that:

• Protect financial sustainability
• Enhance workforce capability
• Strengthen community trust
• Align values with practices

As financial pressures continue and public scrutiny intensifies, local authorities that embrace regular, thorough equal pay audits are better positioned to close existing gaps, prevent new disparities, and ultimately deliver better services to their communities. The message is clear: mind the gap today to ensure local authority success tomorrow.

If you would like to know how WME can support you with Equal Pay Audits contact info@wmemployers.org.uk