Recommendations that rates should be set in comparison with the private sector mean London workers would be paid an allowance of up to 37% more than those outside London.
Adopting this model would add a huge amount to the public sector pay bill. Local government employers - who currently pay one of the lowest London allowances in the public sector
- would have to find the greatest amount of extra money to fund
Although no statutory power exists to force through the recommendations, the high-profile panel of respected public and private sector professionals which made them suggests they will be hard to ignore.
The recent industrial action staged by Unison local government members claimed a flat rate London weighting of£4,000 was well supported, and more action is in the pipeline.
The GMB is currently balloting its members for industrial action over the matter and its general secretary, Mick Graham, is confident of an overwhelming
But the recommendations are not entirely good news for the unions. The report stops short of endorsing a flat rate and instead includes this in a range of suggestions together with a graded element of percentage payments.
So far, the Association of London Government's line has been that Unison is shaking an empty piggy bank, and councils simply do not have the funds to meet the claim. ALG chair Sir Robin Wales (Lab) has said all along that he was waiting for the publication of this review to decide what the councils' next move would be.
The review suggests staff and employers should make a joint approach to central government for additional funds to meet an increased bill. It remains to be seen whether employers will accept these recommendations.
The public sector is currently experiencing acute recruitment and retention problems. In some London boroughs there are 40% vacancy rates for social workers, causing councils real difficulties in meeting their statutory obligations for delivering services.
More money is needed from somewhere, and it will be hard for employers to ignore the report's recommendations completely.