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17 February 2011
Last updated at 07:51 ET
More than a million local council employees in England, Wales and Northern Ireland will not get a pay rise this year.
Unions had been calling for a pay increase of at least £250 a year for all salary grades from 1 April.
But employers said a £6.5bn funding gap and the cost of maintaining services meant they could not afford it.
The ruling applies to 1.4 million workers. Teachers and firefighters are covered by separate pay arrangements.
Jan Parkinson, managing director of Local Government Employers, said: "Hard-working council employees help make local government the most efficient part of the public sector.
"This decision has not been taken lightly. Councils are facing extremely tough choices this year and have to ask their whole workforce to recognise the need to limit spending in all areas."
Pay cut The organisation said the pay demands of trade unions Unison, Unite and the GMB would have added 1.23%, or £265m, to the local government pay bill.
When inflation is taken into account, the freeze will add up to a pay cut for council workers, unions say.
A Unison spokesman said "a toxic cocktail of rising cost of living, cuts to terms and conditions, and now frozen pay means council workers are seeing their money vanish before their eyes".
The spokesman added: "70% of council workers earn less than £21,000 and it is a disgrace that even they will not get any help to make ends meet."
Chancellor George Osborne offered a one-off payment of £250 for all public sector workers earning below £21,000 in his emergency budget last June - but councils say they cannot afford this.
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Unions had been calling for a pay increase of at least £250 a year for all salary grades from 1 April.
But employers said a £6.5bn funding gap and the cost of maintaining services meant they could not afford it.
The ruling applies to 1.4 million workers. Teachers and firefighters are covered by separate pay arrangements.
Jan Parkinson, managing director of Local Government Employers, said: "Hard-working council employees help make local government the most efficient part of the public sector.
"This decision has not been taken lightly. Councils are facing extremely tough choices this year and have to ask their whole workforce to recognise the need to limit spending in all areas."
Pay cut The organisation said the pay demands of trade unions Unison, Unite and the GMB would have added 1.23%, or £265m, to the local government pay bill.
When inflation is taken into account, the freeze will add up to a pay cut for council workers, unions say.
A Unison spokesman said "a toxic cocktail of rising cost of living, cuts to terms and conditions, and now frozen pay means council workers are seeing their money vanish before their eyes".
The spokesman added: "70% of council workers earn less than £21,000 and it is a disgrace that even they will not get any help to make ends meet."
Chancellor George Osborne offered a one-off payment of £250 for all public sector workers earning below £21,000 in his emergency budget last June - but councils say they cannot afford this.
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