THOUSANDS of workers at council-owned firms are part of a two-tier system as they receive lower pay and less favourable pensions compared to town hall staff, Unison warned yesterday.

Research by the union found that 62 per cent of councils own at least one local authority trading company, which provide services such as waste management, social care and investment projects like commercial property rentals.

Councils have established more than 850 of these firms, which employ about one in 20 of those in the local government workforce.