Mind The Gap, Please: UK government facing pressure over delay in gender pay gap reporting

March 3, 2021

3 min read

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What's going on here?

The government’s gender pay gap reporting service may be deferred for a second year running, which is likely to undermine decades of work to close the gender pay gap in the UK. Concerns have been raised about the time it will take to get reporting back up and running, by which time it could be noted that the government has failed to commit to change in this area.

What does this mean?

Gender pay gap reporting was suspended on 24 March 2020 by the Government Equalities Office as a result of the unprecedented circumstances presented by the pandemic. The pay gap reporting service, which was brought into existence in 2017, has come under scrutiny recently for the second time in the four years it has been active. The review has been triggered by a survey from the Chartered Management Institute (CMI), which has revealed that 1,890 managers expected redundancies in 2021, but 80% of them had not taken steps to ensure that these redundancies would not disproportionately impact women.

This isn’t even the tip of the iceberg. In 2019, it was discovered that eight out of ten British businesses paid men a higher wage than women. It is therefore unsurprising that Ann Francke, chief executive of the CMI argues that there is a “very urgent” need to reinstate the gender pay gap reporting.

What's the big picture effect?

The scale of the gender pay gap reporting problem has been escalating for some time. Two years ago, it was reported that 776 companies had released figures. In 2020, this increased to 1,372, yet this year, a mere 474 companies have participated. Two things, therefore, are very clear. Firstly, figures are completely inconsistent, which suggests that uptake between different companies is variable. Secondly, with over 10,000 companies registered for pay gap reporting, the percentage of companies noting figures is negligible. Of course, this may imply some alarming gender pay disparity which employers are too concerned to admit to. Accordingly, the number one concern which has been raised by the CMI is that if the government fails to crack down on reporting, the transparency that was needed to see pay gap progression will never materialise.

Naturally, the pandemic has only exacerbated the problem. Businesses that are suffering from lack of footfall and revenue will be the ones with increased redundancies, which, according to the CMI, has hit women and ethnic minorities the hardest. This has also extended to the furlough scheme, which has ended in further redundancies for businesses that cannot retain employees even through government support. It has been suggested that the reason behind redundancies or indeed lower pay among women amid the COVID crisis is related to reduced hours owing to childcare responsibilities. However, as the Women and Equalities Select Committee has pointed out, with the change in working circumstances and increased employment-related pressure as a result of the pandemic, this is the time where gender pay gap figures should be more transparent, simply because of the change in working patterns and greater flexibility.

 On a final note, suspending gender pay gap reporting only increases the feeling that it is not essential. The Office for National Statistics continues to collect pay gap data which may eventually be used as an indicator to get reporting up and running properly in the future. Nevertheless, the question of how influential this will be, will surely only come to fruition once both the government and employers accept the importance of transparency and the need to wholly promote equal opportunities in the workplace. Given that the system was failing before the pandemic struck, it is currently impossible to tell when any form of progress in this area will be made.

Report written by Evangeline Taylor 

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