An announcement by Local Government Employers (LGE) said that terms of reference for arbitration service ACAS to settle the dispute had been reached, and that “affordability” of any settlement was a key part of the agreement.
Unions were left furious last month when it was believed that the body - which represents the vast majority of English councils - had reached agreement on the ground rules for the binding decision.
They had expected hearings to resolve the dispute over the employers’ side “final offer” of a 2.45% rise in the 2008-9 pay packets for most local government staff to begin late last month.
But LGE said details of the terms of reference had now been agreed , clearing the way for arbitration to begin.
LGE chair Brian Baldwin (Lab) said it was “encouraging” that the agreement now reflected local government’s ability to pay higher wages.
“We have unquestionably reached the limit of what the council tax payer can afford,” he said.
“The credit crunch and the economic slowdown are placing immense, and increasing, demands on councils across the country.“
Cllr Baldwin said the employers’ side looked was “confident” that ACAS would “recognise the exceptionally challenging financial situation councils are operating in”.
The key phrase in the terms of reference states: "The arbitration board shall take into account annual levels of affordability for all local authorities within the context of the 2008-11 CSR period settlements and the impact of the changing economic circumstances since April 2008."
A spokeswoman for Unison, the largest trade union force in local government, said the organisation was pleased the case would now be progressing and that it would be providing “strong evidence” to support workers’ claims for a better deal.
“These may be difficult times for councils, but our members are also struggling to pay their bills this Christmas,” she said.