Local authorities could be forced to use back-pay to rectify inequalities in council worker wages, according to council leaders.

Public sector council workers do not all receive equal pay and authorities are being urged to sign up to legal reforms through which unions and employers can agree on salaries and reimbursements via a process of arbitration.

Councils have until the end of this month to implement equal pay reviews and ensure that male and female staff receive equivalent pay packages.

The overriding fear is that the capitalisation limit - currently £200 million - could inhibit local services if the full amount is used to equilibrate pay.

“Local authorities want to strike the best balance between pay, equal pay and pensions to ensure the best package for both staff and the taxpayer and we need the help of ministers to do this,” said Steve Bullock, chair of the Local Government Employers.

“Councils want equal pay within their workforce and are working hard to achieve it. We are not holding out a begging bowl to central government. This is asking for the flexibility for councils to be allowed to access their own resources,” he continued.

Mr Bullock added that private sector firms were not immune to the “challenge” of equal pay.