Local Government Committee ‘broadly supportive’ of living wage

03/02/2012

The Scottish Parliament’s Local Government and Regeneration Committee has today published a report which is broadly supportive of the campaign for a living wage.

The report recognises the complex range of factors, including local and economic circumstances that can present difficulties to councils seeking to introduce the living wage.

The committee welcomed the innovative approaches used in some areas to deliver the living wage but agreed that decisions on whether it should be introduced in local government are for local authorities.

Committee Convener Joe FitzPatrick MSP said: “It is currently estimated that around 550,000 employees in Scotland are paid earnings below the living wage. 

"Whilst the living wage can help to tackle poverty in work, it is not a panacea. We heard evidence on the potential for those who would receive it to lose out on other benefits – and from businesses concerned it could make companies less competitive and affect their bottom lines.

“Importantly, our Committee also acknowledges that the issue is wider than the moral imperative of the living wage. Local authorities are autonomous bodies that are not accountable either to the Scottish Parliament or the Scottish Government.

"Although most members of the committee would like to see the living wage paid in more councils, we recognise that it is a matter for councils themselves to decide, taking account of the local circumstances.”

The Scottish Government and its agencies, the NHS and seven local authorities are already paying the living wage. (Glasgow City Council, West Dunbartonshire Council, East Renfrewshire Council, North Ayrshire Council, South Lanarkshire Council, Scottish Borders Council and Dumfries and Galloway Council)

The report also comments on:

  • The innovative approaches that have been adopted in some local authority areas (e.g. Scottish Borders Council, East Renfrewshire Council) where the councils and the relevant trade unions have negotiated a settlement that delivered efficiency savings for the council as part of a package of measures that also delivered the living wage.
  • The lack of certainty that setting a living wage condition would be allowed under European Union procurement regulations and welcomes the Cabinet Secretary for Infrastructure and Capital Investment writing to the European Commission to seek clarification.
  • The potential for resentment of public resources being used to under-write the provision of a living wage in the Scottish public sector.

Background

Since December 2011, the Committee has been examining whether the living wage could be implemented in local government and built into local government procurement processes.

The living wage is a voluntary arrangement that has developed as a result of a national campaign and is distinct from the national minimum wage, which is a UK-wide minimum wage (currently set at £6.08 per hour for adults over the age of 21 and £4.98 for young people aged 18-20). It is proposed that the UK Living wage outside London for 2011 should be £7.20.

It is currently estimated that around 550,000 employees on adult rates in Scotland are paid earnings below the living wage.  Information from the Annual Survey of Hours and Earnings (ASHE) can be used to identify the characteristics of these lower paid employees. 

For example, figures shows that:

  • A higher percentage of employees in the private sector Scotland earned less than £7.20 per hour in 2011, than employees in the public sector.
  • In relation to gender, a higher percentage of females earned less than £7.20 per hour in 2011 compared to males.
  • Sales and customer service occupations and elementary occupations (e.g., labourers, cleaners, kitchen and catering assistants) had the largest percentage of employees earning less than £7.20 per hour in 2011.
  • For more figures and analysis, see paragraphs 22-26 in the Report.

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