Living Wage plans rejected

The scheme would have benefited more than 5,000 very low paid workers such as cleaners, care workers and catering staff. The decision came at Tuesday’s Employment in Hampshire County Council Committee meeting.

The county’s Liberal Democrat group had backed the move to increase a living wage to £7.65 per hour. This is already in place in 448 organisations across the country, including many local authorities, such as Eastleigh.

Lib Dem leader on Hampshire County Council Cllr Keith House said: “I am very disappointed that this idea, initially greeted with enthusiasm by all parties, has been ruled out by Hampshire Conservatives without even a discussion with its own staff.

“Evidence shows the Living Wage increases staff productivity and improves staff retention, reducing recruitment and training costs and saving organisations money over time, quite apart from improving quality of life and, for some, dependence on benefits.”

Hampshire County Council issued the following press statement :-

The introduction of a ‘Living Wage’ for lowest paid staff has been debated by members of the Employment in Hampshire County Council Committee (EHCC) at their latest meeting (Wednesday 12 March).

After the meeting, EHCC Chairman and Hampshire County Council Executive Member for Human Resources, Councillor Stephen Reid, said: “Staff are doing fantastic work, and playing a valuable role in helping the County Council to remain in a strong place as a provider of high quality local services to the people of Hampshire.

“The Committee was informed that Hampshire's total package for its employees is actually above the Living Wage once the full terms and conditions of employment in Hampshire are taken into account. This is because we offer benefits which are more generous than many employers, with elements such as pension, annual leave entitlement, and sick pay all above the statutory requirement. This means the total package on offer in Hampshire takes staff above the Living Wage.

“As the Authority looks to make significant savings in the coming year, simply introducing the Living Wage would not be the best thing for the organisation or for staff in the long run. On balance therefore, the Committee decided not to introduce the UK Living Wage at this time.

“The Living Wage would add costs to the County's wage bill, and every school in Hampshire. This would generate upward pressure on the budget, when we are looking for downward pressures. The proposal would also have knock on effects on the services we provide, making them less competitive, for example adding an extra 5p to every child’s school meal in Hampshire, when for the last six years in a row we’ve ensured the price stays the same.

“Any increase to the Council’s wage bill will mean more savings are needed across the organisation, which could lead to job losses. In the current round of efficiencies we have avoided the need for compulsory redundancies through the use of voluntary measures and vacancy management, but the Living Wage proposals might force us to look at compulsory job cuts. At a time of on-going financial constraint, I want to be protecting people’s jobs.

"We are successfully recruiting the staff we need, at the quality we seek. Our overall package is a good one. From the managerial perspective we have a well-structured system of pay grades. Adjusting a few grades is not possible in isolation from the others - changes at one level could ripple up through the whole structure adding to the costs of running the Council, and ultimately creating a large potential impact on Council Tax bills.

"In short, Hampshire already offers a package which is better than the Living Wage, we are recruiting the staff we need and we are successfully navigating the Council through difficult financial challenges. The Living Wage concept is a well meaning one, but is not appropriate for Hampshire County Council at this time."

Note to Editors

At their meeting, the cross party Committee was advised that the UK Living Wage is a voluntary undertaking and not a statutory requirement, and based on a full time employee, working 37 hours a week, it equates to around £14,758 a year, compared against £12,173 on the national minimum wage.

Currently 22 local authorities pay the Living Wage, while 77 councils have implemented policies to introduce it. By introducing a Living Wage, organisations also commit to it for the future and any increases there may be, year-on-year.

Within Hampshire County Council, implementation would impact 1,208 County Council staff on the lowest pay bands, at an additional cost of almost £1 million to the organisation, and 3,927 staff in schools costing over £1 million, which would be for each individual school to find.

The issue comes as Hampshire County Council looks to save £93 million from its budget in the coming financial year, in order to meet an overall savings target of £230 million by 2015, following cuts in its Government grant of over 40 per cent over four years. As the costs of introducing a Living Wage have not been budgeted for in the coming financial year, this would lead to higher expenditure per full time equivalent (FTE) member of staff of £27,270, and could lead to the Council having to cut 29 FTE jobs, and 42 FTE jobs in schools.