Public Sector Property

12.02.19

Glasgow City Council agrees deal to remortgage major venues to finance £548m equal pay settlement

Glasgow City Council has agreed to sell off a host of its major venues and buildings to an arm’s length council-owned body in order to meet the cost of a £548m equal pay settlement with its workers.

The city council will sell a “significant further portfolio” of venues to City Property which will be leased back to the authority at a commercial rate, and long-term loans will be taken out by the council against the value of the venues and “meeting the cost of settling pay claims.”

With buildings such as the Emirates Arena, City Halls, several museums, and Glasgow Royal Concert Hall being transferred to a council-owned body, Glasgow council said the buildings will remain in the city’s ownership, which “crucially” means no change in services or access to the venues.

City Property Glasgow Investments is currently engaging lenders with the aim of refinancing a loan originally taken in 2010, “releasing a significant additional value die to a growth in the value of assets and more favourable interest rates.”

Glasgow City Council members approved the financial strategy to finance the settlement as it welcomed the historic settlement following an agreement with an equal pay claimant group represented by Unison, GMB, Unite, and Action4Equality.

But councillors warned that the annual cost of the deal with interest rates would be around £35m annually for “years to come” with the equal pay claims going back more than a decade.

Council leader Susan Aitken said she was “delighted to have won backing for a deal that finally delivers pay justice for thousands of women in our workforce,” a deal she promised when the SNP took over the council from Labour in 2017.

“A year ago, we began negotiations and, today, the council formally agreed a plan to pay women at Glasgow City Council what they are owed.

“That starts to put right a wrong that has damaged the council, its workforce, and the city for too long.”

Discussions are still ongoing with potential funders, but the council expects over a dozen prominent Glasgow buildings to become part of City Property’s portfolio.

Cllr Aitken said: “I've always been clear that, although settling equal pay has been about delivering justice for thousands of the women in our workforce, meeting the substantial cost of doing that must be fair for citizens.

“Releasing the potential of our property, while keeping it in the city's ownership, protects services and the future of these valued assets.”

Image credit - MarioGuti

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