THE LIVING WAGE – INFORMATION PACK FOR MEMBERS OF THE OVERVIEW AND SCRUTINY MANAGEMENT COMMITTEE 25 SEPTEMBER 2013

1.0 INTRODUCTION AND BACKGROUND 1.1 What is the Living Wage?

• The Living Wage is an hourly rate set independently and updated annually (in November). The UK Living Wage (outside of London) is currently £7.45 per hour. This figure is set by the Centre for Research in Social Policy at Loughborough University. In 2012, the Living Wage was increased from £7.20 to £7.45 (an increase of 3.4%).

• The National Minimum Wage (NMW) is £6.19 for anyone who is 21 years and over (rising to £6.31 on 1 October 2013). Unlike the National Minimum Wage, the Living Wage is not a statutory requirement but a voluntary undertaking. Apprentices are excluded.

• Based on a full-time employee working 37 hours per week, the Living Wage would be £14,372 per annum for Gloucestershire County Council employees.

1.2 A brief history of the Living Wage

• Citizens UK launched the modern Living Wage campaign in the UK in 2001 with parents in East London. Today it is a national movement. The Living Wage Foundation, which is part of Citizens UK, is responsible for promoting, supporting and administering the formal accreditation of Living Wage Employers. Once accredited, organisations can display and use the Living Wage Employer’s Mark.

1.3 How is the Living Wage calculated?

• The Living Wage calculation (Appendix1) takes into account the Joseph Rowntree Foundation Minimum Income Standard (MIS) research in which members of the public identify what is needed for a minimum standard of living. This is then combined with an analysis of the actual cost of living including essentials like rent, council tax, childcare and transport to produce the Living Wage figure.

• It is important to note that whilst the Living Wage is focused on gross hourly pay, the Council does offer additional benefits to support our employees, most notably:

- defined-benefit pension scheme (employer contribution c.24 %) - generous sickness pay entitlement - generous holiday entitlement - childcare voucher scheme offering significant tax/national Insurance reductions - enhanced payments for weekend, Bank Holiday and night working

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1.4 Accreditation and the Living Wage Foundation

• In 2011 campaigners and employers came together to launch the Living Wage Foundation.

• The Living Wage Foundation works with employers to help them implement the Living Wage. It offers accreditation to employers that pay the Living Wage, or those committed to an agreed timetable of implementation, by awarding the ‘Living Wage Employer’ mark.

• To be accredited as an official ‘Living Wage Employer’ an organisation must satisfy four basic criteria:

1. pay all of its own staff at least the Living Wage

2. commit that within six months of the annual uprating of the Living Wage, its pay rates will be uprated accordingly

3. demonstrate progress towards requiring any contractors to do the same

4. have a plan in place to work with any remaining contractors to get them to pay the Living Wage

• Accredited Living Wage Foundation employers comment that the introduction of the Living Wage has enhanced the quality of the work of staff, improved loyalty and customer service, resulted in fewer complaints, improved retention rates and reduced absenteeism. They also comment that the Living Wage has increased consumer/community awareness of their organisation’s commitment to be an ethical employer.

• It has also been argued that lower paid workers tend to spend a greater proportion of their income in local shops and on local services than wealthier people.

1.5 Who pays the Living Wage?

• There are currently just over 350 organisations across all sectors (Public, Private and Third Sector) that are fully accredited to the Living Wage Foundation (Appendix 2). 16 Local Authorities have full accreditation, 7 of which are London Boroughs.

• A number of organisations across all sectors have adopted the Living Wage on an informal basis (either permanently or temporarily) although it is difficult to ascertain an accurate understanding of this. Equally, a number of organisations have considered and rejected implementing the Living Wage.

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2.0 LOCAL AUTHORITIES RESEARCH

2.1 What are other Local Authorities doing?

• A growing number of Local Authorities in England and Wales have reviewed their position on Living Wage in the last few years. Gloucestershire County Council has contacted a number of authorities who have adopted differing approaches.

• A survey by the South West Councils organisation in July 2013 (see Appendix 3) asked County/Unitary/District Councils for their current position on the Living Wage. Out of 35 respondents, 2 have implemented the Living Wage, 3 are ‘firmly committed’, 6 have decided not to implement and 23 are currently considering their options.

• Our own research across a geographically diverse range of Councils has revealed 4 broad approaches being adopted:

2.2 Councils that have adopted the Living Wage in full

• These Councils have successfully applied for full accreditation of the Living Wage Foundation and ensure all their employees (and agency workers) receive at least the Living Wage. They are also actively promoting the Living Wage to their contractors/sub-contractors and working towards fully implementing this requirement through their Procurement and Commissioning processes. They are predominantly City Councils and London Borough Councils.

2.3 Councils that have introduced the Living Wage but not full accreditation

• Typically, these Councils have adopted the Living Wage rate at the time e.g £7.45 and agreed to review that rate each year following the annual uprating (in November).

• These Councils expressed strong reservations about the ongoing requirement of full accreditation to implement the Living Wage to Contractors/sub-Contractors and the knock-on impacts on Procurement/Commissioning processes. They also expressed concern on the potential for the costs to fall on small to medium sized businesses who are less able to absorb them.

• Typically, these Councils have adopted a ‘supplement’ approach whereby a separate supplement is paid to impacted employees in parallel to the existing pay and grading structure. This allows the existing pay and grading structure to remain intact while introducing a supplement that recognises cost of living pressures.

2.4 Councils that have reviewed and rejected adopting the Living Wage

• These Councils have referenced a variety of reasons for rejection but most often citing costs (particularly in relation to schools), impact on salary/grading structures and the open-ended commitment to a Living Wage increase to which they have no control of the rate at which it is set.

2.5 Councils that are monitoring developments with no firm commitment to review

• The majority of Local Authorities currently fall into this category although our research indicates that an increasing number of Council’s are aware of the Living 3

Wage campaign and acknowledge they will have to make a decision in the next few years.

2.6 Benchmarking

• A benchmarking exercise has been undertaken covering both geographically close and similar sized Councils. Some useful examples to note are:

• County Council 1: Cabinet rejection (April 13) as costs deemed too prohibitive.

• City Council 1: implemented a ‘Living Wage supplement’ (subject to annual review) across 3000 staff (including schools) at a cost of £1.5m. They also subsidised schools for six months. They are currently considering a second year payment of a Living Wage supplement but dependent on ongoing negotiations with Trade Unions on wider Terms and Conditions rationalisation.

• City Council 2: implemented a payment equivalent to the Living Wage (for one year 1st April 2012 to 31st March 2013). This affected 1,616 staff (including schools) at a cost of £1m (excluding on costs). They are currently considering their position for 2013/14 and will be dependent on negotiations with Trade Unions on wider Terms and Conditions rationalisation.

• Unitary Council 1: Full Council agreed to fund and pay the Living Wage in February 2013 and implement in October 2013. Options currently being considered.

• County Council 2: not implemented due to estimated cost of £1.2m.

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3.0 COST AND INFORMATION ANALYSIS

Contracts Below Living Wage Area Permanent Fixed Term Temporary/Casual Total GCC 95 24 0 119 Schools 555 99 123 777 Total 650 123 123 896

FTE Below Living Wage Area Permanent Fixed Term Temporary/Casual Total GCC 58.4 17.33 0 75.73 Schools 127.06 19.13 22.72 168.91 Total 185.46 36.46 22.72 244.64

Cost of Implementing the Living wage with Estimated On Costs Area Permanent Fixed Term Temporary/Casual Zero Hour No - Mo Total GCC £109,166 £30,533 £0 £18,780 £2,678 £161,157 Schools £240,763 £32,540 £39,439 £25,491 £2,260 £340,493 Total £349,929 £63,073 £39,439 £44,271 £4,938 £501,650 • Data as at 11 September 2013

3.1 Headline summary

• 896 employees impacted.

• 87% (777) are in Maintained schools (Community and Voluntary-Controlled) roles. 13% (119) are in GCC related roles.

• Total cost of implementing Living Wage at £7.45 per hour is estimated to be c. £501,000 of which £340,000 is in Schools. This excludes Apprentices and outsourced services that are provided to the Council and schools.

3.2 GCC (non-schools) - Permanent and Fixed Term contract employees

• There are 119 GCC employees in this group currently paid below the Living Wage. Of this number, 21 are in administrative roles and 98 are in Manual Roles. 49 of the manual roles are in Gloucestershire Industrial Services Healthcare (GIS) employed as Workshop Operators. The other significant group are School Crossing Patrol employees with the remaining employees undertaking a variety of roles such as Kitchen Assistants and Car Park Attendants.

3.3 Schools - Permanent and Fixed-Term contract employees

• There are 654 permanent and fixed-term contract employees in Community and Voluntary Controlled schools currently receiving below the Living Wage. Of these, 347 are employed in a Pupil Supervision role and 181 are cleaners. The remaining employees span a range of roles, including administrative and playwork type roles.

3.4 Schools - Casual/Temporary employees

• There are 123 employees in this group, which predominantly include cleaners and Pupil Supervisers.

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3.5 Zero Hour and No Mutual Obligation contracts

• The GCC employees in this group are almost exclusively on the Temporary Staff Register (TSR) holding roles. The flexible nature of the TSR means it is impossible to state the nature of the work that an individual will undertake whilst on a placement.

• Of those with Zero Hour or No Mutual Obligation contracts in a school setting, the greatest number were again in Pupil Supervision or employed as cleaners.

3.6 Agency Staff

• The Agency Workers Regulations require agency workers to be treated no less favourably than Council staff (after 12 weeks). This means the council is obliged to consider the impact of the Living Wage on any agency staff. However, initial research suggests that the numbers are small.

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4.0 SCHOOLS

Employees (Permanent & Fixed-Term) Role Type Employees Admin 32 After School 8 Breakfast Club 7 Breakfast Club Supervisor 5 Catering Assistant 18 Cleaner 181 Cleaner in Charge 13 Handyman 8 Library Assistant 4 Playworker 31 Pupil Supervision 347 Total 654 4.1 Data summary

• 654 employees across 148 schools have been identified as being affected if the Living Wage is introduced. There is 1 Secondary, 7 Special and 140 primary schools impacted. The primary schools impacted are county wide.

• In total, the increase would account for just over 0.5% of the overall school budget in 12 schools and in the one secondary school the increase is 0.2%. In 43 schools, the increase accounts for less than 0.1% of their budget for the year. The increase would account for just over 0.5% of 20 schools’ salary budgets for the previous year.

• No school is impacted by more than 1% of their previous year’s salary budget.

• 94% of all affected employees in schools are female. This may present an increased risk of an equal pay claim if the Living Wage is introduced in central GCC roles but not in schools*.

4.2 Consultation and funding considerations

• The total Dedicated Schools Grant is allocated to its schools by the Local Authority (LA) via the 'local funding formula' which is agreed by the Local Authority in consultation with the Schools Forum. Funding is not specifically allocated for staffing - it is predominantly pupil-led in line with Department of Education grant conditions.

• Any decision to introduce a Living Wage will need to include consultation with the schools and the Schools Forum.

• Responsibility for allocation of resources and financial management in schools and academies rests with the Governing Body. Maintained schools adopt the Local Authority salary scales for non-teaching staff although they are free to decide where on the scales, they appoint people.

• Individual schools would have to meet the cost of the Living Wage from the existing budget allocation which could pose unwelcome cost pressures especially in small schools.

*equal pay considerations are detailed in a separate section

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5.0 GCC EMPLOYEES IN SERVICE AREAS

GCC Service Area Breakdown Employees Additional Service Area (Permanent & Cost Fixed Term) Commissioning 5 £4,890 Delivery 78 £115,042 Enabling & 3 £6,401 Transition School Crossing 30 £11,230 Strategy & Challenge 3 £2,136 Total 119 £139,699

GCC Employees - Roles Role Type Employees Admin Assistant 21 Cleaner 1 Crossing 30 Domestic 11 General Assistant 2 Kitchen 4 Parking Attendant 1 Workshop Operator 49 Total 119

5.1 Data summary

• The most significantly impacted group of employees are School Crossing Patrol and Workshop Operators.

• The total cost for uprating employees (permanent and fixed-term) in this group is c £140,000.

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6.0 PAY, GRADING AND EMPLOYEE RELATIONS

6.1 Living Wage impact on the Council’s Pay and Grading Structure

• The County Council implemented its new equal pay compliant Single Status Pay structure from 1st June 2003 comprising 12 job evaluated grades (see Appendix 4). This covers GCC and school support employees, whose terms and conditions of employment come under the Joint National Council for Local Government Services.

• The Council’s grading structure has within it breakpoints to separate one grade from the next and has been established robustly through the job evaluation process to ensure there are differentials between grades or bands.

• All employees currently paid on salary grades A, B and C, spinal column point 4 (£6.30 per hour) to spinal column point 10 (£7.19 per hour) will receive an increased basic salary.

• It will lift Grade A and B employees to the penultimate point of Grade C. This will impact on pay differentials with supervisors being paid the same salary as those they supervise.

• As well as the increase in basic salary costs, the adoption of the Living Wage will increase employer pension and national insurance contributions.

• The current job evaluation process would be compromised i.e. the evaluation of roles at Grades A and B would be meaningless as the minimum rate of pay would sit at the top of Grade C. Differentials at this lower level would therefore be lost. Groups of employees will be bunched together on the same pay rate doing different jobs where the perceived values are different.

• In 2013, the Living Wage was increased from £7.20 to £7.45 which is an increase of 3.4%. National pay offers will be limited to 1% in the forthcoming years. Therefore if the Council became an accredited Living Wage employer and the annual Living Wage increase remained at 3.4% (exceeding those made through the national agreement), then by 2015 there will be significant pressure on the Council’s existing grading structure.

• Based on the current Living Wage salary of £14,372, the impact would be as follows:

1% National agreement Living Wage @ 3.4% 2013 £14,880 - Grade C, scp11 £14,372 2014 £15,030 (C scp 11) £14,820 2015 £15,180 £15,224 - overtakes C scp 11

• By 2015 the Living Wage would reduce Grade C to one salary point (which would also be the start point of Grade D) and be only £170 below Grade D, scp 12. From 2016 onwards, there will be ongoing erosion of the salary grading structure as the increases in the Living Wage continue to outstrip national pay awards. This could lead to a need to review the pay and grading structure in its entirety which would be a costly process in itself.

• An option could be to revise the job content of lower graded posts to add responsibilities appropriate to the level of pay. This does, however, rely on the identification of additional responsibilities to increase the job size for the entire population in Grades A, B, and C. 9

• The potential knock on effect could therefore be the need to undertake a full job re- evaluation exercise in order to retain the integrity of the pay and grading structure.

• The most commonly used approach by Councils when introducing the Living Wage has been to introduce it as a separate supplement in parallel to the existing pay and grading structure. This allows the existing pay and grading structure to remain intact.

6.2 Impact on Employee Relations

• Although it is difficult to anticipate, there is a need to consider the potential impact on employee relations of applying a large headline pay increase in percentage terms to some employees and not others.

• It is also worth noting that UNISON is currently consulting with its members on its 2014/15 pay claim to the National Joint Council for Local Government Services. The claim sets out two alternative options, both of which are based around the implementation of the Living Wage.

• Council employees have received only a 1% salary increase in the last 4 years (5 years for senior managers). As part of the 2013 agreement, the lowest paid employees on SCP4 will automatically be uplifted to SCP5 (with the associated increment) with effect from 1 October. This is in addition to the 1% salary increase received from 1 April. Grade A will therefore be removed from the grading structure.

• The Council has also agreed (via collective agreements with the recognised Trade Unions) two packages of changes to terms and conditions in 2011 and 2012 aimed at reducing our staffing costs via rationalisation of benefits and conditions.

• The lowest paid employees (Grades A to C) were protected from the locally negotiated incremental freeze during 2011/12.

6.3 Additional payments

• The Council makes enhancements to qualifying employees who undertake work at night or over the weekend and Bank Holidays. This equates to an hourly rate of £8.40 minimum.

• The Living Wage would only apply for hours worked at the basic rate of pay and applied to contracted hours.

6.4 Summary and further considerations

• The impact of introducing the Living Wage has the potential to significantly distort the pay and grading arrangements, as well as increasing costs, both financially and administratively for the Council.

• The recent collective agreement for terms and conditions was put in place to enable the Council to make a permanent reduction from staffing costs of £1m. Adopting the Living Wage would potentially be adding back in a cost of c£161,000 per annum.

• There are potential employee relations implications, particularly in the current economic climate. Paying a Living Wage to the lowest paid workers might lead to pressure from other groups of employees to maintain pay differentials, especially those performing duties that are additional or at a higher level of responsibility.

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7.0 PROCUREMENT AND CONTRACTORS

7.1 Background

• The Living Wage Foundation encourages accredited employers to have a timetable in place for all contracted staff to move to the Living Wage. This can be done on a rolling basis as contracts expire.

• While there is no specific cut-off point, the Living Wage Foundation has an expectation that all employees within organisations that the Council has commissioned services will move onto the Living Wage within two to three years.

7.2 Considerations

• The impact on the cost of contracts could be considerable and difficult to quantify

• It could have a disproportionate impact on small organisations wishing to bid and possibly for any spin out of services through community right to challenge. Public Sector pensions are already seen as a significant obstacle in any tendering process for small/voluntary sector organisations and this would potentially place a further barrier on these organisations becoming involved.

• The accreditation process does not require the Council to intervene and amend existing contracts. Using the Council’s commissioning and procurement process, the Council would need to review the requirements for integrating a Living Wage as contracts came up for renewal. In addition, a monitoring framework would need to be put in place to ensure that progress is maintained and monitored and benefits identified.

• It could also give rise to equal pay risks within a contracting organisation. For instance contractors who have a number of contracts with different authorities would not be able to apply the Living Wage to one group of employees without creating and equal pay risk. If they applied the Living Wage across their workforce this could have a knock on effect to other contracts.

• Whilst it would not breach procurement regulations the Council would be obliged to ensure that we made this a requirement across all tenders. This may, however, breach a number of local policies, such as any Council policy to encourage and promote small business. Legal Services have advised that we would be required to revise such policies in order to avoid Judicial Reviews.

• The situation with the Council’s current contracts is mixed. There are a number of contracts where employees of the contractor are wholly or mainly engaged on delivery of services for the Council. However, there are also a number of contracts where the contractor’s employees only spend a small proportion of their time on services for the Council.

• The Council would potentially need to consider a revised Procurement Strategy which would involve an approach that supports firms seeking to win contracts to understand the benefits of a Living Wage and to help them design and submit tenders. In the commissioning of services, the Council would need to take into account a bidding organisation’s ethos, structure and approach to staffing policies and procedures in considering the wider benefits that would accrue to local communities. 11

7.3 Approach taken by other Local Authorities

• The approach taken by other Local Authorities who are seeking to promote a Living Wage through their procurement policy would appear to indicate that most (if not all) are stopping short of actually including a commitment to pay a Living Wage as an element of their evaluation criteria.

• The London Boroughs (who have full accreditation status) ask bidders during their procurement process to indicate whether they would be willing to apply the London Living Wage (LLW) to their staff. However, this does not seem to form part of the formal evaluation process i.e. a bidder who refused to pay the LLW would not be scored less as a consequence than a bidder who agreed to do so. If a bidder who has indicated they would be willing to accept the LLW commitment is eventually appointed, then the authority will generally seek to include appropriate clauses in the final contract. The bidder is free to reject these clauses but, if it does accept them, then they will become part of the contract and binding on the contractor.

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8.0 EQUAL PAY

Gender Split Gender GCC GCC % School School % Female 64 53.78% 614 93.88% Male 55 46.22% 40 6.12% Total 119 100.00% 654 100.00%

8.1 Considerations

• The Council does not anticipate any vulnerability to equal pay claims if the Living Wage were to be adopted across the Council for all GCC employees, including schools. To ensure that any potential Equal Pay risks are mitigated it would be essential that the principles of the Living Wage is applied consistently across the Council to all employees and workers.

• On a balance of probabilities it is likely that the Council will be able to justify the differential treatment compared to other employees on the basis that the application of the Living Wage is a proportionate means of achieving a legitimate aim i.e. paying a Living Wage.

8.2 Impact for Maintained schools

• A school has the delegated power to decide where to appoint employees on the pay scale and could therefore choose not to apply the Living Wage (if Council made the decision to implement the Living Wage across the Council, including schools).

• In this scenario, as the school would be acting contrary to Council policy, the school rather than the Council would be liable to fund any compensatory equal pay award.

• Claims could not come from staff in Foundation, Voluntary Aided or Academies because they are separate employers in their own right.

8.3 If schools are not included in the proposal

• As a greater proportion of females are employed in schools (to whom the Living Wage would not be applied) and who fall below Living Wage than in the comparable non-schools group, then there would therefore be a risk of equal pay claims. The Council would have liability for any potential compensatory awards as the school would not be acting contrary to Council policy.

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9.0 WELFARE BENEFITS

9.1 Potential impact on employees in receipt of welfare benefits

• There is a possible complication where employees are also in receipt of welfare benefits.

• The payment of the Living Wage could take an employee over an earnings threshold meaning they lose the current benefit they are in receipt of. This loss could therefore be greater than the gain and hence they could be worse off.

• There is a significant group of employees within one area of the County Council where this could be a particular issue. Our understanding is that a number of the employees are in receipt of means tested and disability-related (non means tested) benefits.

• The extent of the potential impact is difficult to assess without having access to individual employee details and records from the Department of Work and Pensions.

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10.0 SUMMARY & KEY CONSIDERATIONS FOR LEAD MEMBERS OF OSMC

This information pack has covered the following key areas for consideration:

• Background on the Living Wage and the Living Wage Foundation

• Approaches taken by other Local Authorities:

- a growing number of Local Authorities in England and Wales have reviewed their position on Living Wage in the last few years. Gloucestershire County Council has contacted a number of authorities who have adopted differing approaches

- 4 broad approaches being taken by Local Authorities: full accreditation to the Living Wage Foundation, informal adoption (permanent or temporary), rejection due to prohibitive costs and currently considering/monitoring

• Costs and information analysis:

- 896 individuals impacted

- 87% (777) are in Maintained schools (Community and Voluntary- Controlled) roles. 13% (119) are in GCC (non-school) roles

- total cost of implementing Living Wage at £7.45 per hour is estimated to be c.£501,000 (of which £340,000 is in schools)

• Schools impact:

- 654 permanent/fixed term contract employees. 94% are female

- the increase would account for just over 0.5% of 20 schools’ salary budgets (from the previous year)

- no school is impacted by more than 1% of their previous salary budget

• GCC (non-Schools) impact:

- the most significantly impacted group of employees are the School Crossing Patrol and Workshop Operators

• Pay, Grading and Employee relations:

- all employees currently paid on salary grades A, B and C, spinal column point 4 ( £6.30 per hour) to spinal column point 10 (£7.19 per hour) would receive an increased basic salary

- it will effectively lift Grade A and B employees to close to the penultimate point of Grade C. This will impact on pay differentials with supervisors being paid the same salary as those they supervise

- as well as the increase in basic salary costs, the adoption of the Living Wage will increase employer pension and national insurance contributions

- potential knock on effects of full accreditation could be the need to undertake a full job re-evaluation exercise in order to retain the integrity of the pay and grading structure. By 2015, the pay and grading structure would be under significant pressure

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- Trade Unions are increasingly raising the Living Wage at both a local and a national level through various ongoing campaigns and via pay claims i.e. UNISON for 2014/15

• Procurement and Contractors:

- the Living Wage Foundation has an expectation that all employees within organisations that the Council has commissioned services to would move onto the Living Wage within two to three years.

- the impact on the cost of contracts could be considerable and difficult to quantify

- it would potentially have a disproportionate impact on small organisations wishing to bid and possibly for any spin out of services through community right to challenge

• Equal pay:

- the Council does not anticipate any vulnerability to equal pay claims if the Living Wage is adopted across both Maintained schools and GCC

• Welfare benefits:

- the Living Wage could take some employees over a threshold meaning they lose a means-tested related benefit. The loss could therefore be greater than the gain and hence some employees could be worse off

10.1 Options:

The table below summarises the potential benefits, risks and options for consideration by the Committee:

Benefits Risks

Avoids building unplanned & Council loses opportunity to uncontrollable salary costs into demonstrate the value it places on the future budgets. work undertaken by its lowest paid employees along with potential Integrity of salary & grading associated benefits of lower turnover structure remains. Maintains & absenteeism, higher morale, differentials on pay related to job retention and retaining key front line Do nothing content. Avoids costly full job re- skills. evaluation exercise. Employee Relations – Trade Unions Procurement processes remain continue campaign and groups of intact and potential for bidders to employees become de-motivated, increase contract costs lack engagement resulting in higher diminished. absenteeism and turnover. Employees currently in receipt of means tested or disability related allowances likely to maintain current entitlements.

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Builds unplanned and uncontrollable salary costs into future budgets. Disproportionate impact on primary schools. Initial cost of c£501,000.

Immediate impact on pay differentials with some supervisors being paid the same as those they supervise.

Increases consumer/community Integrity of current salary/grading awareness of GCC’s commitment structure would be compromised by to be an ethical employer and 2015 potentially resulting in the need support the lowest paid employees for a full job re-evaluation exercise. Become a performing vital front line services. fully Procurement/bidding costs could accredited Evidence that it improves loyalty, increase for the Council as bidders Living customer service, fewer raise their costs to incorporate the Wage complaints, improved retention Living Wage commitment. employer rates and reduced absenteeism. Potential disproportionate impact on Evidence supports that lower paid small/local organisations wishing to workers tend to spend a greater bid and possibly for any spin out of proportion of their income in local services through the community right shops and on local services to challenge. thereby supporting the local May impact some employees in economy in Gloucestershire. receipt of means tested/disability related benefits by taking them over the threshold. This potential loss of income could be greater than the gain and hence they could be worse off.

Demonstrates the value the Council places on the work undertaken by its lowest paid employees along with potential associated benefits (as above on lower turnover, reduced Initial significant costs. absenteeism etc). Introduce a May impact some employees in Living Avoids building unplanned & receipt of means tested/disability Wage uncontrollable salary costs into related benefits by taking them over supplement future budgets. the threshold. This potential loss of reviewed Integrity of salary & grading income could be greater than the gain annually structure remains. Maintains and hence they could be worse off. differentials on pay related to job Introduces a separate process for content. annual review. Avoids potential procurement and Contractor issues.

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Appendix 1 – The Living Wage Calculation

The calculation is based on 4 steps and it has in place certain features to prevent ‘spikes’ in wage rates.

1. For each of nine household types, the Minimum Income Standard is used to represent the basket of goods and services that a family needs to buy in order to reach a minimum acceptable standard of living. The MIS costs used here exclude housing costs, which are the most variable costs from one part of the country to another, as well as council tax and childcare.

2. For each of these household types, costs are added on for childcare, rent and council tax, based on calculations from across the UK outside London.

3. For each of the nine family types, the required wage for meeting these living costs is calculated. This assumes that the adult(s) in the household work full time and that people claim all the benefits and tax credits that they are entitled to.

4. The resulting wage requirements for the nine household types are averaged, weighted according to the prevalence of different household types in the population, to produce a single Living Wage, rounded to the nearest 5p.

The formula used will limit the rate of any increase to a maximum of two percentage points above the rise in average income/median earnings. Appendix 2 – Employers Accredited to the Living Wage Foundation

Souce: Living Wage Foundation (http://www.livingwage.org.uk/who-accredited), accessed on and correct as at 13 September 2013

Local Authorities Accredited to the Living Wage Foundation Birmingham City Council London Borough of Hounslow London Borough of Southwark Brighton & Hove City Council London Borough of Islington Norwich City Council Blackpool Council London Borough of Ealing Salford City Council Caerphilly County Borough Council London Borough of Lambeth Oxford City Council Harlow Council London Borough of Lewisham Preston City Council London Borough of Camden Examples of other Employers Accredited to the Living Wage Foundation 11KBW First Transpennine Express Ltd Penrose Care 20 | 20 Business Insight Fiveways Playcentre People's Health Trust A Space Station PLC G. Baldwin & Co Ltd Poplar Harca Abacus Care (Birmingham & South Midlands) Ltd Global Markets Consultants Procure Plus Accenture Great Ormond Street Hospital Children's Charity PwC Action Aid H.P. Cleaning Ltd Queen Mary UoL Appendix 2 – Employers Accredited to the Living Wage Foundation

Advance Union Hamilton Brown R&J Supported Housing Advantage Accreditation Limited Herbert Smith LLP Rathbones Age Concern Kensington and Chelsea Hermes Fund Managers RDF Group Amnesty International Hodgins Smith Consulting Ltd Reddish Vale Academy Trust Aquila Way Hogarth Architects Resolution Foundation Barking & Dagenham Council for Voluntary Service Holman Fenwick Willan LLP Resolution Operations LLP Barts and the Royal London Hope Worldwide Resource for London Bates Wells & Braithwaite ICAEW Royal College of Midwives Bethnal Green Academy Insight Public Affairs Salix Homes BioRegional Development Group Institute for Public Policy Research Samuel Rhodes School Blackstone Chambers Ltd Intact Centre Preston Sarasin Bootstrap Company Ltd Intentionality Community Interest Company Save the Children British Association of Social Workers Involve North East Schools Offices Services Bromley-by-Bow Centre Involve Yorkshire & Humber SCOR C Beaumont Limited Isla Bikes Scotswood Natural Community Garden CAFOD Islington & Shoreditch Housing Association Secure Retail Ltd Capacity Global Jack Brown Ltd Share Scotland Cardiff Community Housing Association Jigsaw Support Scheme SilverTree Home Support - CiC Catholic Trust for England and Wales Joiner's Arms Shoreditch Slaughter and May CCLA Investment Management Kayleigh Plant Hire Somerset Gas Central Finance Board of the Methodist Church Kingsmith Care Ltd Southdown Housing Association Central Scotland Police Kingswood Consultants Limited Spectrum Property Care Ltd Centre for Strategy and Communication Ltd (The Centre) Knowle West Health Park Company Spencer Group Children North East KPMG St Catherine's Holdings Limited Church Action on Poverty Labour Party St Charles Sixth Form College Church Army LASA St James's Church Piccadilly Chwarae Teg / Fairplay Workforce Leeds Christian Community Trust St Paul's Cathedral CIFAS Leeds Church Institute Surrey Association for Visual Impairment Citizens UK Legal & General Syd Bishop & Sons (Demolition) Ltd City College Norwich Lewis Silkin The Boxing Academy City Health Care Partnership CIC Linklaters The Campaign Company City of Wolverhampton College Lloyd's of London The Law Society Clifford Chance London Business School The London School of Economics & Political Science Collinson Plc London Community Foundation The Manchester College Community Links (Leeds) London Funders The North Highland College Community Links (London) LSE Student Union The Paperchain Partnership Contextual Theology Centre Lush The Spencer Group CORGI HomePlan Limited LVSC The Young Foundation Appendix 2 – Employers Accredited to the Living Wage Foundation

Counselling Rooms CiC Manchester Alliance for Community Care Total Care Security Coventry Refugee & Migrant Centre Mark Humphries Legal Tower Hamlets Homes CPAG Match Solicitors Toynbee Hall Cripplegate Foundation Matrix Chambers Trinity Centre Management Committee Crisis UK Merton Voluntary Service Council Trust For London CRMC Trading Ltd Millstream Associates Ltd TUC Curzon Mishcon de Reya Twist London Ltd Cynnal Cymru - Sustain Wales Mobius Networks UCL Student Union Deloitte National Assembly for Wales UNICEF Devereux Chambers National Housing Federation Unity Trust Bank Direct Plastics Limited National Literacy Trust University of Huddersfield Disability Action in Islington NAVCA University of Strathclyde Students Association Dyslexia Action NCVO UnLtd* E R Williams (Painting Contractors) Limited New Economics Foundation Updata Infrastructure UK Ecigarette Direct: The Smoker's Angel (Gower Enterprises Ltd) North Somerset UNISON UPG Ergo Plus Facilities Ltd Norton Rose Fulbright Urban Cottage Industries Eunomia Research & Consulting Nottingham CVS Vestigo Fabian Society Nu Instruments Limited Voluntary Action Islington Fair Pensions O'Donovan Waste Disposal Ltd Wakefield District Wellbeing Consortium Fairfield Environmental Services Limited Olswang Wales & West Housing Fellowes Associates Outer Temple Chambers West End in Schools / Blue Box Entertainment Limited Fentons Solicitors Pathway Intermediates White & Case LLP First Response Training & Consultancy Services Ltd Patient Opinion Limited Women Like Us First Rung Ltd Yarlington Housing Group

Survey Re Living Wage (July 2013)

Progress Towards the Living Wage Authority Name Imple- Firmly Firmly Consider- Other Other / comment mented committed decided ing not to commit Unitary 1 x At officer level watching developments to be in a position to review position if climate changes Unitary 2 x Some research has been done on this, but currently we’re not taking it forward. Unitary 3 x In non-schools it is relatively inexpensive to implement, but there is a significant cost in schools. We are currently looking at the impact so should have an answer in the next few weeks. Unitary 4 x

Unitary 5 x

Unitary 6 x

Unitary 7 x Proposals for implementing a living wage are being considered. We’ve agreed to pay a living wage with effect from 1 Oct 13, but what that looks like in Oct and in the future is to be determined. Unitary 8 x

Unitary 9 x We’re committed to implement but looking to roll up with another of other changes before implementing. Unitary 10 x

Progress Towards the Living Wage Authority Name Imple- Firmly Firmly Consider- Other Other / comment mented committed decided ing not to commit Unitary 11 x

County 1 x Firmly decided not to commit; still being challenged by the opposition but rejected on the basis of cost. County 2 x

County 3 x

County 4 x UNISON will be raising this with our HR Policy Committee in September 2013.

District 1 x The intention is to implement a living wage in January 2014 (subject to Council approval) It is more likely than not that this will be approved. District 2 x

District 3 x

District 4 x But are uplifting cleaners’ pay.

District 5 x

District 6 x It was mentioned by Members some time ago and I was asked to explain the difference between the Living Wage and the Minimum Wage. However it has gone no further than that and we have no current plans to go anywhere with it. District 7 x Council District 8 x Progress Towards the Living Wage Authority Name Imple- Firmly Firmly Consider- Other Other / comment mented committed decided ing not to commit

District 9 x We are going to implement the LW from September for our staff but will not apply for accreditation due to pending EU legislation re contractors District 10 x

District 11 x

District 12 x Working towards the living wage by eliminating the lower spine points. Our lowest spine point for staff (other than apprentices, and some casual posts) is scp 9. District 13 x We have not formally considered this.

District 14 x Council considering it in July.

Districts15 & 16 x Reports have been put to both sets of Members within x the past 3 months and they confirmed that the living wage principle ‘should be considered as an area for development in future pay policy’.

District 17 x Considering it. Also looking at out pay structure we only have one member of staff who falls below the Living Wage at this moment in time. Districts 18 & 19 x Our councils have not considered the application of the x living wage and have no plans to do so

TOTAL 2 3 6 16 7

APPENDIX 4 - GCC & SCHOOL SUPPORT STAFF GRADING STRUCTURE

These pay scales reflect the last negotiated pay award (1%) SCP 1 Apr 09 1 Apr 13 by the National Joint Council for Local Government Services A which was in 2013. SCP 4 4 £12,145 £12,266 B 5 £12,312 £12,435 SCP 6 £12,489 £12,614 4-7

7 £12,787 £12,915 C 8 £13,189 £13,321 SCP 9 £13,589 £13,725 7-11 10 £13,874 £14,013 11 £14,733 £14,880 12 £15,039 £15,189 D 13 £15,444 £15,598 SCP E 14 £15,725 £15,882 11-17 SCP 15 £16,054 £16,215 13-19 16 £16,440 £16,604 17 £16,830 £16,998 F

18 £17,161 £17,333 SCP 19 £17,802 £17,980 17-22 20 £18,453 £18,638 G 21 £19,126 £19,317 SCP 22 £19,621 £19,817 19-27 23 £20,198 £20,400 24 £20,858 £21,067 25 £21,519 £21,734 H 26 £22,221 £22,443 SCP 27 £22,958 £23,188 23-31 28 £23,708 £23,945 29 £24,646 £24,892 30 £25,472 £25,727 I 31 £26,276 £26,539 SCP 32 £27,052 £27,323 28-36 33 £27,849 £28,127 34 £28,636 £28,922 35 £29,236 £29,528 36 £30,011 £30,311 J 37 £30,851 £31,160 SCP 38 £31,754 £32,072 34-42 39 £32,800 £33,128 40 £33,661 £33,998 K 41 £34,549 £34,894 SCP 42 £35,430 £35,784 38-46 43 £36,313 £36,676 44 £37,206 £37,578 L 45 £38,042 £38,422 SCP 46 £38,961 £39,351 43- 47 £39,855 £40,254 49 48 £40,741 £41,148 49 £41,616 £42,032

Note: Spinal Column Point (SCP) 4 is to be removed with effect from 1 October 2013 as a result of the 2013 pay settlement.