Can Croydon Become a Living Wage Borough?

Fairness Commissions in other parts of London and other cites have been looking at how Councils can consider how to implement the Living Wage. The Living Wage is clearly very desirable – but in the present constrained state of local government finance, very tough for Councils to afford – especially for contracted-out services, and above all for adult social care.

This will be one of the biggest challenges for the Croydon Commission which the new Labour administration is setting up (Cabinet 30 June). Its creation was a Labour manifesto commitment in the local elections along with the pledge to make the Council a London living wage one and to implement the London living wage in all new council contracts. 

The Commission will need to look at the costs of introducing the Living Wage. Although a number of Labour Councils have adopted the London Living Wage as policy, very few are ensuring it is paid  to staff employed by service contractors. The revenue commitment involved in doing this is likely to dwarf all other demands on the revenue budget.

The Commission - will need an analysis of:

·       Which contracts come up for renewal in which financial year;

·       How many staff employed on each contract are paid below the London Living Wage;

·       What the (recurrent full year as well as part year) cost of putting these jobs on the London Living wage would be.

·       Which contracts fall on the General Revenue Budget (ie, Council tax + business rate + government grant) and which can be met from other sources (such as Schools Budget or Housing Revenue Account)

With the spread of outsourcing and service contracting, most Councils now  directly employ relatively few staff at below the living wage £200k would probably be more than  enough to pay the Living Wage now to directly employed Council staff – at least for the first year.

A further complication is added if one takes into account the growing percentage of Council employees who are part-time, especially women, which a Unison study suggests rises questions about exploitation: www.theguardian.com/local-government-network/2014/jun/24/overworked-and-underpaid-truth-part-time-workers-local-government.

But other Councils in similar circumstances have found that the cost of moving staff employed by contractors to provide adult social care to the London Living Wage would impose a huge strain on the revenue budget.

It will be easier to fulfil the manifesto pledge to campaign to make Croydon a living wage Borough. But there is a no guarantee that real progress with be made in Croydon’s private sector. When this issue was raised in an interview on Croydon Radio a Westfield spokesman said they could not force retailers in the proposed new shopping centre to adopt the Living Wage.

The Cabinet paper can be accessed at https://secure.croydon.gov.uk/akscroydon/users/public/admin/kab14.pl?operation=SUBMIT&meet=27&cmte=CAB&grpid=public&arc=1