Agenda item

To consider a report by the Head of Finance (copy attached) to provide information about and to consider the implications of paying the Real Living Wage.

The Lead Member for Corporate Standards, Councillor Mark Young, introduced the report (previously circulated) to provide information about and to consider the implications of paying the Real Living Wage (RLW) and becoming a RLW accredited employer.

The Lead Member confirmed work and discussions were being carried out involving the revised pay structure from April 2019 to incorporate the changes introduced by the Local Government Pay Award.

At this juncture, the Lead Member for Finance, Performance and Strategic Assets, Councillor Julian Thompson-Hill, provided information on the financial challenges.  There would be uncertainty moving forward if Denbighshire County Council became an accredited RLW employer, as the Council would need to guarantee all suppliers and contractors who dealt with Denbighshire were also paid the RLW.  One of the largest cost implications would be the care sector, which would increase by £1million-£1.5million the result of which could result in reduction in other service areas.

At this juncture, Councillor Graham Timms put forward two amendments to the recommendations.  The initial amendment was for a RLW update report to be submitted to Full Council in July 2019 but following discussion it was agreed the report be submitted to Full Council in December 2019.  The amendments were SECONDED by Councillor Cheryl Williams.

The amendments were as follows:

(i)              Denbighshire County Council agrees that from April 2019 onwards, all employees shall earn at least the minimum of the real living wage set by the Real Living Wage Foundation by the April following the announcement of the result of the new annual calculation. 

(ii)             Denbighshire County Council also agrees to instruct its officers to prepare a report for Full Council in December 2019 that outlines how the Council could move towards the goal to ensure that all those working for the Council either directly or indirectly are paid at least a real living wage and it should include costs and estimates to enable the Council to make an informed decision on the issue.

During debate the following points were raised:

·       It was confirmed in respect of payment of staff, the national pay deal meant the RLW or equivalent thereof, would be paid in April 2019.  During the last few years the lower end of the scales had increased by a much higher percentage than those further up the pay scales.  This had caused a compression of scales, which had meant a new pay spine being agreed nationally which would commence from April 2019.  Discussions were taking place with unions regarding the process of transferring staff from the current pay scales on to the new pay scales.

·       The issue in respect of guaranteeing to always pay the RLW would, as mentioned previously, cause a situation where the lower scales rise to equal to a higher scale.  This would cause disquiet from staff due to the erosion of pay differentials.

·       Regarding external companies working for Denbighshire, this would cause procurement issues as they would require to be audited and monitored.  Information regarding this issue could be brought back as further information.

·       It was confirmed that within Wales, Cardiff City Council were the only accredited RLW employers.

At this juncture a vote took place and the results were as follows:

(i)              In favour of the recommendations plus 2 amendments – 33

(ii)             Abstain – 0

(iii)            Against the recommendations plus 2 amendments – 10

Therefore, it was:

RESOLVED that:

(i)              The Council notes the estimated cost implications of paying the Real Living Wage and becoming a Real Living Wage employer

(ii)             The Council receives, in December 2019, a report on the recommendation of the Real Living Wage Foundation and the outcome of the national pay negotiations, and, if there is a differential between the two, decide whether or not to pay the Real living Wage to its staff in the following financial year.

(iii)            The Council also agrees to instruct its officers to prepare a report for Full Council in December 2019 that outlines how the Council could move towards the goal to ensure that all those working for the Council either directly or indirectly are paid at least a real living wage and it should include costs and estimates to enable the Council to make an informed decision on the issue.