The first cabinet meeting of Birmingham City Council under Labour administration will approve an immediate wage rise for 3,000 of the local authority’s lowest-paid workers.
Under the proposal, all staff on the lowest grades will be paid a minimum of £7.20 an hour, up from £6.39 at the moment. The increase will be worth up to £686 a year.
The ‘Living Wage’ commitment was a central feature of Labour’s manifesto at the council elections on May 4, where the party cruised to power by taking 77 of the 120 council seats.
Labour is yet to say exactly where the money to pay the increase will come from. Council leaders simply state that the annual £1.3 million cost of the venture will be built into the long-term financial planning process.
Some Conservative councillors have warned that the decision to reward 3,000 employees could be challenged in the courts by thousands of other council staff who will not receive a pay increase. The Living Wage initiative could fall foul of equal pay legislation, it is claimed.
Once approved by the cabinet on June 11, the rise will be in the July pay packets for 2,500 staff.
A further 500 schools employees also earn less than the Living Wage, and consultation with head teachers and chairs of governors is being carried out, to secure their support to implement the proposal.
Of those affected – roughly six per cent of the entire workforce – 88 per cent are women, working in roles such as kitchen assistants, cleaners and domestic assistants, all of which have traditionally been hard posts to recruit for, with a high staff turnover.
Coun Ian Ward (Lab Shard End), Deputy Leader of Birmingham City Council, said: “It is only right that our hardworking employees get a fair day’s pay for a fair day’s work – and up to now that has not been the case for thousands of staff.
“The Living Wage will make a real improvement to the quality of life for those affected, and research from elsewhere where it has been introduced shows that attendance, motivation and loyalty are all improved along with better recruitment and retention of workers.
“We are also keen to ensure the financial impact of the removal of allowances under the Birmingham Contract, for which mitigation measures end in October, is softened. The Living Wage is a worthwhile way of doing this.”
A detailed study is also set to be carried out to consider the benefits to the local economy and citizens of Birmingham of a broader application of the scheme to cover contractors and agency providers to the council. The findings are expected to be published by Cabinet next month.
The concept of the Living Wage was developed by the Joseph Rowntree Trust, and is the term used to describe the minimum hourly wage necessary for shelter (housing and incidentals such as clothing and other basic needs) and nutrition.
This standard generally means that a person working full-time with no additional income, should be able to afford a specified quantity or quality of housing, food, utilities, transport, health and recreation.
Since its establishment in 2000, the Living Wage has been adopted and advocated by a number of local authorities including Glasgow City Council and the Greater London Authority. Private sector firms have also adopted the scheme, including KPMG, Lush Cosmetics and Barclays Bank.