Almost 3,000 low-paid Birmingham City Council workers will receive an immediate wage rise of up to £50 a month if Labour takes control of the local authority at the elections on May 3.
The party is committed to dismantling the lower scale of a controversial pay and grading review forced through against bitter trade union opposition by the current Conservative-Liberal Democrat coalition, by introducing a pledge that no council worker will earn less than £7.20 an hour.
The promise will cost £1.2 million a year to deliver and means that six per cent of the workforce – 2,743 employees who at the moment are paid between £6.39 and £7.15 an hour – will be better off.
Sir Albert Bore, leader of the opposition Labour group, said he wanted to make Birmingham City Council a “living wage employer” by scrapping the £6.39 an hour band, which is marginally above the national minimum wage of £6.19 an hour.
Labour’s plan will increase the income of lowest paid staff by £686 a year, based on part-timers working an average 16.3 hours a week. Most of those who stand to benefit are women cleaners and school kitchen assistants.
Sir Albert could not say exactly where the £1.2 million would come from, although it is possible that policy contingency funds may be raided. “This is a realistic figure and one that can be afforded from within the existing budget,” he added.
A Labour-led council will also “encourage” private firms in Birmingham to adopt the living wage rates, lifting employees significantly above the minimum wage.
The pay and grading review, which was completed in 2008, resulted in about 5,000 council workers suffering a wage cut, with some up to £10,000 a year worse off. However, 20,000 members of staff in traditionally poorly paid jobs including cleaners, cooks and carers received a pay rise.
The review was followed by a coalition decision to save £10 million by scrapping payments for night shifts and weekend working by implementing the Birmingham Contract. Among those hardest hit were 800 home carers on basic pay of £15,400 who will lose an average £2,254 in weekend pay.
Sir Albert said Birmingham would join a growing list of employers committed to paying the living wage including Barclays Bank, HSBC, PWC, KPMG, two London boroughs and Glasgow City Council.
Private firms which the council does business with will be urged to adopt the living wage deal, and a list of those that comply will be published by the council, Sir Albert said. He added: “We will take this out to the businesses of Birmingham, in particular through our contracts process.”
He promised to use the billions the council spends to preserve existing jobs and create new employment by buying more goods and from local businesses.
Labour will review all contractors and commissioned service providers, to ensure that the carers who look after friends and family when they are at their most vulnerable, and all those who serve the city, are paid a living wage, he added.
Sir Albert said: “We believe that people working in Birmingham deserve more than the poverty level of the present minimum wage. These are often people who work in difficult circumstances providing care for others.
“We need a motivated and committed workforce open to change. All the evidence suggests that this simple cost effective change will improve morale, job quality and service delivery, with very little increase in costs.
“Only Labour will fight for fairness and dignity for all. A Living Wage in Birmingham is good for business, good for the individual, good for society and good for the taxpayer. That is Labour’s vision. We will use our public procurement power, Be Birmingham, Buy Birmingham, Build Birmingham to rebuild our local economy, and at the heart of our approach, a Fair Birmingham.”
Jack Dromey, Labour’s Shadow Housing and Local Government Minister and MP for Birmingham Erdington, said the wage deal would encourage council staff to work harder.
Mr Dromey added: “From Glasgow to London, people are starting to realise the simple truth that if you pay people better you boost productivity. By paying people a Living Wage we will take the pressure off the Exchequer through benefits and tax credits, putting more money in people’s pockets to spend in the local economy.”