CASH-STRAPPED councils warned yesterday that government funding deficits would impose “financial pressure” to pay staff the new £7.20 an hour “living wage.”
Local authorities said they would need a combined £1 billion increase over the next 10 years after Chancellor George Osborne detailed his proposal to introduce a so-called national living wage (NLW) in this Budget last week.
The cost of implementing it should be taken into account when council funding levels are set, the Local Government Association (LGA) said..
Workers aged over 25 will be paid a minimum of £7.20 an hour from April next year, rising to £9 by 2020 in a policy widely slammed for being labelled a “living wage,” taking into account factors such as tax credit cuts, inflation and the higher overall cost of living over the next five years.
Though 95 per cent of workers employed by local authorities already earn more than £7.20, the policy would cost councils a minimum of £340 million a year from 2016, analysis by the LGA revealed.
There are 92,820 mostly part-time council employees such as street cleaners, school-crossing patrols and dinner staff who earn less.
LGA chairman Gary Porter said: “If government was to fully fund the cost of introducing the NLW to council staff and care workers, councils could avoid extra financial pressure being placed on them as they continue to protect services such as caring for the elderly, collecting bins and filling potholes.”
A Department for Communities and Local Government spokesman said: “Like the rest of the public sector, (councils) will have to continue playing their part in tackling the deficit to ensure the economic recovery continues.”