CALDERDALE MBC GOVERNANCE AND BUSINESS COMMITTEE 15 July 2013 The Calderdale Living Wage REPORT OF THE DIRECTOR

OF COMMUNITIES

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PURPOSE OF THE REPORT Governance and Business Committee approved at their meeting of 16 April 2013, (via previous report of Director of Communities on Employment Policies), the recommendation to commence consultation with Trades Unions and employees on proposals to implement new and revised employment policies including the adoption of the Living Wage. Since that time a broader opportunity has been recognised for Calderdale as Borough leader and major local employer, to more widely address poverty challenges by influencing the sub region to move towards adopting The Living Wage. The purpose of this report is to report back on the internal staff and TU consultations and to recommend a wider Calderdale Living Wage policy. RECOMMENDATIONS That Committee approve the proposed policy on Calderdale Living Wage attached at Appendix 1. In order to implement and incentivise adoption of the Calderdale Living Wage, the Director of Communities develops a Delivery Plan and campaign to extend the impact of the Calderdale Living Wage as outlined in the attached Policy. That the Head of HR finalise and manage the arrangements for implementing for 2013/4, the Living Wage as a monthly salary supplement (on contracted hours) for directly employed staff on our substantive grading scheme. That the Head of HR review implementation arrangements in 2014 and report back to Committee on future arrangements for addressing the Councils commitment to the Living Wage. BACKGROUND The Living Wage has become established on the national agenda as one way to address low pay and to provide a decent standard of living through earnings rather than supplements from the state. The Institute for Public Policy Research (IPPR) Resolution Foundations recent report Beyond the Bottom Line highlights empirical evidence supporting the principle of enhanced earnings, their social value and role in incentivising work. The

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report also identifies the benefit to HM Treasury through increasing income tax receipts and national insurance contributions, whilst seeing spending falling on tax credits and in work benefits. 3.2 Calderdale Councils commitment to finding ways to tackle poverty is key to its wider core strategic objectives and development of the Calderdale Living Wage could be an important tool to influencing the wellbeing of the Borough and its citizens economically and personally. The Living Wage Commission reviews and published annually the living wage level. This is currently 7.45 per hour. CALDERDALES APPROACH The Council, as a major public sector employer in the Borough, has the opportunity of influencing pay, life chances and wellbeing through a number of means by paying the Living Wage to its employees and encouraging others to do so by using its buying power through public procurement to encourage take up of the Living Wage by its suppliers and more generally in the local private sector by exploring ways to incentivise adoption of the Living Wage amongst small and medium sized enterprises (SMEs), who may otherwise find it unaffordable, through targeted intervention, through the City Region and lobbying for living wage city deals.

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Further detailed work will be undertaken including development and implementation of a delivery plan in line with the attached Policy to develop the external focus of this initiative. THE LIVING WAGE FOR CALDERDALES EMPLOYEES Focusing on the internal opportunities, the Council made a commitment in its recent budget plans to provide a growth line of 250k for 2013/4 to provide a platform for moving towards a living wage for internal directorate employees. There are currently 390 employees, paid below the Living Wage, who would benefit from this commitment: they generally work in cleaning and catering. The initiative has been the subject of consultation with staff and TUs as part of wider changes to Employment Policies (see additional report Employment Policies' G&B Committee 15/7/2013). A number of TU and open sessions were held 17/4/2013 - 24/6/2013, and in particular attempts were made to reach those who would be affected by this proposal. The following issues were raised during consultation TUs generally welcomed the initiative, but would seek a long term commitment and integration into pay.

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There was concern that about the potential impact for some employees on other benefits received. Employees will be no worse off if the Living Wage is adopted however reduction in some other state benefits may result. Employees cannot voluntarily opt out of the additional pay should the Council choose to adopt the Living Wage. Concerns were raised by some employees about erosion of their differentials with colleagues (eg those in supervisory positions) risks of equal pay challenges may therefore arise.

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A number of complexities arise in the safe implementation of an initiative which seeks to improve pay levels but which is not aligned to our national and local pay and grading schemes and the review of which Calderdale has no control. It is therefore recommended that the Living Wage is introduced as a monthly salary supplement on contracted hours for directly employed employees on our substantive grading scheme. Arrangements will be reviewed annually and determined locally dependent upon current market conditions. There will be a further review in 2014. NEXT STEPS In order for the Council to realise its ambition to influence to adoption of the Calderdale Living Wage externally and more widely a delivery plan and campaign will be launched autumn 2013, in line with the Calderdale Living Wage Policy.

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Robin Tuddenham Director Communities 15/7/2013

APPENDIX 1

Calderdale Living Wage Policy

Towards a Living Wage Borough Calderdale Council is committed to supporting the principle of the Living Wage and to supporting a rate of pay for its employees which ensures they and their families can live free from poverty. The Council as a major public sector employer in the Borough recognises its key role in supporting the local economy through paying the Living Wage to its employees and encouraging others to do so. It will realise this aspiration through a Calderdale Living Wage campaign, which develops and promotes a local living wage to improve the pay, life chances and wellbeing for local people. The Council is committed to using its buying power through public procurement to encourage take up of the Calderdale Living Wage by its suppliers. This will support the wider adoption of the Calderdale Living Wage in the private sector through qualifying contracts taking account of European Union law and value for money. Calderdale Council will explore ways to incentivise adoption of the Calderdale Living Wage amongst small and medium sized enterprises (SMEs), who may otherwise find it unaffordable, through targeted intervention , through the City Region and lobbying for living wage city deals What the Calderdale Living Wage will mean in practice Calderdale Council will lead the implementation of Calderdale Living Wage from 1 st October 2013 paying the current recommended level of a minimum of 7.45 per hour. This level will then be subject to annual review and determined locally dependent upon current market conditions. This payment will be implemented as a monthly salary supplement in 2013/14 and will be reviewed further in 2014. This policy will be supported by a Delivery Plan and campaign to extend the impact of the Calderdale Living Wage. The Councils Calderdale Living Wage campaign will commence from autumn 2013 to promote Calderdale Living Wage agreements and sign up to a Calderdale Living Wage scheme across the public, private and voluntary sector in the Borough. This campaign will be about more than pay, and will seek to empower and give voice to low paid workers in the workplace and wider society. Calderdale Council will advocate and lobby at a sub-regional and City Region level to promote the benefits of the Living Wage to the wider regional economy and as part of the Boroughs commitment to reduce poverty. The Council will, as part of its Delivery Plan, explore ways to encourage SMEs to adopt the Living Wage as part of the wider strategy to encourage take up recognising the large number of SMEs locally, and their contribution to the local economy.

Calderdale Council will encourage and promote on a case by case basis that all employees of contractors delivering contracts for the Council are paid the Calderdale Living Wage. Whenever the Council is lawfully entitled to do so, it will include reference to the terms and conditions of the contractors workforce as part of the procurement process. This will be developed in a manner consistent with European Union legal requirements. The potential impact of the Living Wage in Calderdale The Living Wage has become established on the national agenda as one way to address low pay and to provide a decent standard of living through earnings rather than supplements from the state. The Institute for Public Policy Research (IPPR) Resolution Foundations recent report Beyond the Bottom Line highlights empirical evidence supporting the principle of enhanced earnings, their social value and role in incentivising work. The report also identifies the benefit to HM Treasury through increasing income tax receipts and national insurance contributions, whilst seeing spending falling on tax credits and in work benefits. The introduction of the Living Wage for Council employees will enhance pay for 390 employees of the Council. Following the launch of the Calderdale Living Wage, a process of recognising all employers which have signed up to the Living Wage will be implemented. This has the potential to create wider economic benefits for the Borough. Governance The Calderdale Living Wage Policy will be considered by the Councils Governance and Business Committee and, if approved will be subject to annual review. It is proposed that a Calderdale Living Wage Advisory Board will meet twice a year to monitor the implementation and impact of the Calderdale Living Wage. All reports to Cabinet which include a decision on award of a contract will refer to whether the proposed supplier will be paying its employees the Calderdale Living Wage. Evaluation and Review This Policy will be reviewed by the Governance and Business Committee in May 2014 and thereafter on an annual basis. This review will include full information on the level of sign up to the Calderdale Living Wage and the estimated economic impact of the policy in the Borough. May 2013