Glasgow City Council will pay £1.5 billion to rent its own buildings over 30 years, according to reports.

The local authority will need to pay around £32 million a year as part of the controversial deal made to find the money for £770million of equal pay claims.

The “sale and leaseback” plan saw the authority sell a number of “operational property assets” to a council-operated legal entity which then rents them back to taxpayers at a commercial rate for 32 years.

The proposal was signed off by councillors almost a year ago.

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Properties involved in the scheme include Kelvingrove museum, the Gallery of Modern Art, Kelvin Hall, and brand new schools in Sighthill and Gowanbank.

The local authority paid out £550m in 2019 to end a legal challenge over the unfair pay grade system which saw some male workers paid more than women in equivalent roles.

However, that only covered the period up to 2018.

As a new pay grading scheme has still not been introduced, the authority needs to settle the remaining liability as well as some outstanding claims.

The sale and lease-back arrangement was used to finance the previous settlement, with the council's arm’s-length City Property Glasgow Investments LLP borrowing to purchase the buildings and then leasing them back.

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According to the Sunday Mail, the Bermuda headquartered Assured Guaranty has brokered £220million of borrowing for the council for the second settlement. .

The total repaid for the £550million loan is likely to be around £938million while the second deal to borrow £220million will cost taxpayers £608million.

This second loan struck in 2022 appears to have attracted less favourable rates due to the worsening economic situation.

A council source told the paper: “Nobody is suggesting that the workers, mainly women, who are receiving payouts are not entitled to them, however the financial impact of this will be felt for decades.

“The council is effectively mortgaging off all of the valuable buildings it owns, putting them up as collateral for £759million of commercial loans.

“A tax haven headquartered firm will be cashing in on part of this deal, and a total £1.5billion in rental payments for the luxury of the council using its own buildings will flow into the coffers of a number of private finance firms rather than funding municipal services.

“The alternative would have been the council effectively declaring itself bankrupt like Birmingham.

“The cuts are already being made and they are going to accelerate and deepen to the detriment of thousands of people who live in the city.

“The other side of this is that the council is going to need to squeeze every last penny of revenue out of the public.

“That is likely to come through increased council tax bills, the introduction of congestion charges, parking charges, fees for renting football pitches or charging for entry to galleries, parks and museums which has been free until now.

“There is no guarantee that this is over either, but when the next crisis hits there will be nothing left to sell off.”

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Leader of Glasgow City Council, Susan Aitken admitted the price of the deal would be high but insisted it was necessary.

The Herald:

She said: “I made it a priority to put right years of pay inequality in Glasgow. I’m very proud of the progress we have made and to be nearing the end of what has been an enormous challenge.

“The price of discrimination is a high one and Glasgow will be paying it for a long time.

“However, if years of fighting women workers that were seeking justice was perhaps the worst thing this council has done; then I believe the effort over the past five years to bring us to this point has been among the best.

“It has been a hard road. It has been fraught and it has been painful at times – but it has been essential to right an egregious wrong.”