Pay deal lifts threat of council strikes

Plans for more strikes by council staff are set to be called off after unions won a large pay increase for more than one million workers.

The two-year deal, which will see wage rises of almost 11 per cent for some of the lowest paid, has lifted the threat of more "crippling" industrial action, but it has also raised fears that local authorities could be forced to cut services or raise taxes to pay for the new package.

Ian Swithenbank, chairman of the National Employers Association, warned that many of the government employers he represents may be forced to cut staff.

He also acknowledged that the deal, proposed by conciliation service Acas, could boost confidence among public-sector unions that they can win big pay increases, despite Gordon Brown's insistence that extra money should not be used this way.

In a joint statement, the three unions involved - Unison, TGWU and GMB - said: "The proposals represent a fair deal for local government employees and a strong platform to end low pay and unequal pay." Jack Dromey of the TGWU added: "An army of low paid, part-time, women workers will crash through the £5-an-hour barrier."

Public sector workers held a 24-hour strike last month.