Birmingham Living Wage: How we did it

By on 11/02/2016 in Blog, Cllr Stacey

Claire Ward – Assistant Director (Workforce Strategy) – blogs on how Birmingham City Council has implemented the Birmingham Living Wage…

Claire Ward - Assistant Director (Workforce Strategy)

Claire Ward – Assistant Director (Workforce Strategy)

Back in 2012, the first act of the incoming council administration was the implementation of the then National Living Wage for all council employees.

Ensuring “a fair day’s pay for a fair day’s work” saw 3,000 council employees elevated to what we now call the Birmingham Living Wage that July, at the rate set independently by the Living Wage Foundation.

Members felt that a clear statement had to be sent out to our employees and other employers in the city that the culture of low-paid jobs that had followed the decimation of the city’s manufacturing base in the early 80s was no basis for rebuilding the city’s economy.

Following the annual review of the Living Wage rate, a further 400 employees became eligible in 2013/14 along with another 400 Agency workers, and latest figures (taking into account staffing fluctuations) show that we now have approximately 2,800 staff uplifted to the current rate (£8.25 outside of London from April 1).

But the work didn’t stop there. Parallel to the in-house roll-out of the Birmingham Living Wage, we developed the Birmingham Business Charter for Social Responsibility (BBC4SR), designed to extract the maximum social value possible from the council’s £1billion annual purchasing power.

A cornerstone of this policy, championed by Cllr Stewart Stacey (Cabinet Member for Commissioning, Contracting and Improvement), is a requirement for contractors to pay the Living Wage to those employees working on Birmingham contracts.

Since its implementation in April 2013, existing contractors have been invited to sign up to the charter (and thus the requirement to pay the Living Wage) on a voluntary basis. But for new contracts suppliers are required to sign up, and to pay up, as a condition of those contracts (or grants). And this also extends to and down their supply chain.

Recent figures show this has had a positive impact for some of the lowest paid in society. More than 600 employees of contractors/service providers have had their pay increased to the Birmingham Living Wage as a result of their organization being amongst the 276 that are currently accredited to the charter.

But increased pay has immense social and economic benefits for everyone in society as much of the extra money earned by Brummies will be recycled within the local economy, meaning other firms and workers benefit.

And there is even direct gain for the employer through increased workforce motivation and productivity.

For example, when NCL won the latest parking enforcement contract 55 wardens had their pay elevated by 20 per cent from the minimum wage to the then Living Wage of £7.85. But their manager was confident she could finance this through reduced staff turnover (with its recruitment, training and uniform costs) and sickness rates and improved motivation: in fact the new contract is cheaper than the old!

Social care is one major area currently outside the scope of the Charter in recognition of the funding issues that the sector faces. However, proposals are at an advanced stage that should see pay improvements for people working in that sector. It shouldn’t be the case that we pay the least to those who care for those we love the most.

Here in Birmingham we’ve proven that despite some people doubting it, the largest local authority can implement the Living Wage (as set by the Living Wage Foundation, rather than the Government’s new minimum wage) and reap the social and economic rewards that come with such a policy.

It’s something any council, large or small, should definitely consider as a mechanism through which to improve the prosperity of their area.

A version of this article first appeared on the Local Government Chronicle website this week.

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