Potential equal pay liabilities prevent auditors from signing off city council accounts

Coventry must publish audited financial statements for the year ended March 2025 by the backstop date of 27 February 2026.

However, external auditors at Grant Thornton said they would be unable to obtain sufficient appropriate audit evidence by the deadline to conclude that the authority’s financial statements as a whole are free from "material misstatement".

This is partly due to a lack of clarity on whether ongoing equal pay claims are likely to succeed.

In the independent auditor's report to the council, auditor Andrew J Smith wrote: "Due to the limitations imposed by the backstop date we have not received management’s assessment of the probability of the claims being successful and the estimation of any associated liabilities.

"We have concluded that the possible effects on the financial statements of undetected misstatements arising from these matters could be both material and pervasive.

“We have therefore issued a disclaimer of opinion on the financial statements."

In the council’s statement of accounts, Coventry said there was currently “no reliable assessment of the likely success of these claims or the financial cost if they are demonstrated to be valid”.

It added: “It is probable that this matter will be subject to complex and protracted legal proceedings and negotiations between the relevant parties.

“The Council’s previous experience of dealing with claims of this nature is that there can be a very significant difference between the assessed maximum theoretical cost and the final settlement value.”

A report from Coventry's Corporate Finance Manager, Tina Pinks, meanwhile confirmed that Grant Thornton had not received the council’s assessment of the probability of the claims being successful or an estimation of any associated liabilities, “and have therefore not concluded work in this area”.

According to a report from the BBC News, Cllr John Blundell told the Audit and Procurement Committee last week (2 February): "I know we went through equal pay claims several years ago and it is obviously disappointing that it has come back."

Barry Hastie, the director of finance and resources, replied that work was going into defending the claims that were lodged around two years ago.

The news comes three years on from GMB Union launching equal pay claims against Coventry after describing the authority as a “pay discrimination hot spot”.

Further controversy arose just under a year later, when the council announced plans to terminate the contracts of waste collection staff in order to end the practice of “task and finish”, which had led to equal pay claims from female members of staff.

Adam Carey