The Sub-Committee considered a report on
progress being made to identify the implications of and actions
necessary to become an accredited Living Wage Employer. The Head of
People Services presented the report and summarised the main
The report explained the difference between
the Real Living Wage and the National Living Wage. Members noted
that accreditation would commit contractors to having all regular
third-party contracted staff paid the Real Living Wage. Contracts
deemed to be in scope were identified in the restricted Appendix to
the report. The Sub-Committee noted the contents of the
It was highlighted that the Council would be
required to build Living Wage compliance into its procurement
processes and in particular communicate its position to all
potential suppliers and build the living wage requirement into
pre-qualification questionnaires. Officers estimated that Living
Wage accreditation would potentially add around £300,000 a
year to Council costs, but this was a very rough estimate and the
figures would need to be firmed up before any final commitment to
Furthermore, agency workers would transfer
onto Real Living Wage rates after 12 weeks. It would be necessary to change that transfer
point to 8 weeks to meet the Foundation criteria. It was estimated that this would add around
£20,000 to employment costs each year although use of agency
workers can vary from year to year.
It would be 5 years before the Council could
build the Living Wage into all of its contracts. That would not
preclude gaining Living Wage accreditation as long the Council can
satisfy the Foundation that its plans and procurement process
changes were meaningful and credible.
The report explained that perhaps the biggest
concern was that some national players might be deterred from
bidding due to concerns about the pay structure implications for
their wider national workforce.
More widely it would be reasonable to predict that building Living
Wage compliance into the procurement processes would narrow the
pool of providers willing to tender and would tend to increase
It was also explained that requiring
contractors to pay above the legal minimum wage (National Living
Wage) would appear to be in breach of EU procurement regulations.
Leaving the European Union may remove this barrier.
In conclusion, Members were advised that more
work is required to resolve the issues described in the
report. It was proposed to bring a
further update to the next meeting of the Sub-Committee. Officers
indicated that it may be appropriate to consider merging this
initiative with the Fair Employer resolution also agreed at Council
In the ensuing discussion, Members were in
agreement that the information provided in the report was a useful
starting point, but that more information was required before
reaching a decision. Submitting a further report to the next
meeting was the appropriate way forward. It was suggested that seeking feedback from
contractor organisations would be helpful and Officers were
requested to include this in the next report.
RESOLVED: That the Sub-Committee:
note the progress being made to ...
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