This article illustrates the dilemma that councils face.  They are dammed if they do and dammed if they don't.  It's perfectly valid for government, especially in times of crisis (and when the cap was imposed most LG funding came from General Taxation) to impose a public sector pay cap.  Lifting the 1% cap and intimating that a 2% rise or more is justifiable surely needs to be supported by funding, otherwise the cap shouldn't have been uplifted.  

LG is in a very different place to 2012 both in salary comparisons and numbers. It would have been honest for Government to say 2% and any funding above that had to be paid for locally. Its disengeneous to lift the cap and then pass the buck straight to LG.