Female workers who successfully made equal wage claims against Glasgow City Council are to receive payouts after a deal with a major pension fund.
LGIM Real Assets will pay £285 million to the local authority’s City Property in return for security in the form of assets including the SEC Armadillo and the City Hall.
LGIM Real Assets is acting on behalf of clients including Legal & General Retirement Institutional.
Glasgow City Council recently agreed to pay a total of £548 million after hundreds of female workers, successfully claimed they were paid £3 an hour less than men in the same pay grade.
It is estimated that around 12,000 Glasgow households will benefit from the settlement of the equal pay dispute.
SNP council leader Susan Aitken said: “Settling Glasgow’s equal pay dispute and delivering pay justice for our women workers is a hugely significant step forward for the council and the city as a whole.
“This deal not only means we can start to put right a historic wrong, but do so while safeguarding the future of the city’s property assets in public use.
“I’m very pleased to be doing that in partnership with Legal & General, which continues to show great confidence in Glasgow as a place to invest.”
Legal & General’s long-term financing is secured on an underlying property portfolio of 473 commercial assets located in and around Glasgow. The portfolio includes a range of Ground Rents, office assets and industrial estates, as well as strategic assets. These include landmarks such as the SEC Armadillo and City Halls, which have been retained by Glasgow City Council for the benefit of the community.
In the last year, Legal & General investments in the city have included the 324-home Build to Rent scheme at Buchanan Wharf, the development of 160 room hotel opposite Queen Street Station, the acquisition of the Scottish court and tribunal building and the forward funding of the Atlantic Square Development to provide a major new UK Government hub.
A council statement said: “This long-term financing demonstrates the positive impact that a proactive local authority and long-term debt investment can provide.
“Through the partnership, GCC has been able to deliver on its promise to resolve the equal pay dispute whilst also protecting its property assets, many of which have been in council ownership since the mid-1900s.”
Lorna Brown, Head of Real Estate Debt at LGIM Real Assets, said: “This transaction is testament to our ability to provide significant and complex financing to the public and private sector and our commitment to investments which have a positive social impact.
“It follows a busy start to 2019, with debt investments across multiple asset classes for a range of property investors. Legal & General supports Glasgow City Council in addressing their historic pay issues through the provision of the majority of the capital required to meet this liability.
“This is a strong long-term partnership for our real estate debt team alongside City Properties Glasgow (Investments) and Glasgow City Council and is an excellent fit for our pension fund capital.”
