Agenda item

(CSP: MEC & MEC1)

Purpose: To ensure that no employee directly employed by the Council (excluding schools) is paid less than "The Living Wage" set by The Living Wage Foundation each November.

Resolved that:

·         The Council adds a West Berkshire Council "Living Wage Supplement" to the pay of all employees who would otherwise receive an hourly rate below The Living Wage with effect from 1st October 2015.

·         That schools are encouraged to use the "Living Wage Supplement" for their employees who would otherwise receive an hourly rate below The Living Wage.

This decision is eligible to be ‘called-in’.  However, if the decision has not been ‘called-in’ by 5.00pm on 18 September 2015, then it will be implemented.

The Executive considered a report (Agenda Item 10) which responded to the Conservative Manifesto pledge to implement a Living Wage.

It was proposed that no employee directly employed by the Council (excluding schools) was paid less than “The Living Wage” set by The Living Wage Foundation each November.

There were 17 corporate employees currently paid below the Living Wage rate of £7.85 ph. Many more employees were paid below the Living Wage rate in schools.

The report explained the current situation; the case for change; set out three options; and made a proposal. The proposal would see the Council shadow the Living Wage (not to be confused with the government's new "national living wage") by using a West Berkshire Council "Living Wage Supplement" which would increase each 1st November. The report looked at the higher costs for schools and set out a proposed approach for schools. The National Living Wage (NLW) would be set at £7.20 per hour from 1 April 2016 outside London and would rise to £9.00 per hour by 2020. Only those over 25 would be entitled to the NLW. Although the NLW would rise to £9.00 per hour by 2020 it was likely that the voluntary ‘Living Wage’ set by the Living Wage Foundation would always be higher than the compulsory NLW set by the government. There was concern amongst local authorities that the introduction of the NLW would mean increased costs in the system which would either need to be met by the providers, the local authority or a combination of both. The report set out the likely increase in costs in ASC of £2m per year due to the introduction of the NLW from 2016/16 to 2020 and this could be higher if the Council formally pledged to become a Living Wage employer.

The cost increase could either be absorbed by services affected or met from a central fund. It was recommended that the cost be absorbed by the relevant services.

It was also recommended that the Council commend the introduction of the "Living Wage Supplement" to schools. It would be up to individual governing bodies to decide if their school could afford to implement the "Living Wage Supplement".

Councillor Lundie stated that this was a symbolic step for the Conservative Party and the Council to ensure fair pay.

Councillor Macro declared that he supported the policy as it was a good initiative. He observed that the Council had modelled the financial implications when all those contracted by Adult Social Care were paid the National Living Wage as being £2m. When the National Living Wage was enforced in April 2016, contractors would also have to pay the National Living Wage. Councillor Lundie stated that this policy was just the start of the discussion around fair pay in West Berkshire. The national policy would take six months to come through. The Council were not proposing to become nationally accredited and therefore force contractors to pay a Living Wage but would be encouraging other organisations such as schools to adopt Living Wage policies.

Councillor Dillon enquired whether potential contractors might be asked at the pre-qualification questionnaire stage whether they were a Living Wage employer and use this information to determine whether to appoint the contractor. He went on to add that this would not cost the Council more money as the tender price would include associated wage costs and would help the Council to ensure it was contracting to organisations with similar values. Councillor Lundie agreed that the question could form part of the pre-qualification questionnaire but there were many factors to be taken into account when appointing a contractor.

RESOLVED that the Council adds a West Berkshire Council "Living Wage Supplement" to the pay of all employees who would otherwise receive an hourly rate below The Living Wage with effect from 1st October 2015.

That schools are encouraged to use the "Living Wage Supplement" for their employees who would otherwise receive an hourly rate below The Living Wage.

Reason for the decision: To meet a manifesto commitment to raise low pay thresholds.

Other options considered: Formally sign up to the Living Wage Foundation -rejected because that would also mean forcing contractors to pay The Living Wage to the contracted workforce.

To abolish the use of spinal column points below The Living Wage- rejected because schools not following the Council's example will still need these spinal column points.