London Living Wage policy could cost Brent Council £11m
PUBLISHED: 07:00 31 October 2014
The implementation of the London Living Wage (LLW) policy by Brent Council could drive up a forecasted multi-million pound budget deficit by £11m, a council report reveals.
According to the document by the council’s chief finance officer, the revised budget shortfall could a surge to £68m, if the labour administration adopts its pre-election pledge to make agencies LLW complaint.
While Brent Council currently pays its directly employed staff at least the LLW, set at £8.80, it cannot force its suppliers to the do the same.
The salary is based on the amount an individual needs to earn to cover the basic costs of living in the capital.
Suresh Kansagra, leader of the Conservative party, said: “I am all for the living wage but whether we can afford to implement this policy at a time where we have to make lots saving remains to be seen.
“The plans needs to be scrutinised thoroughly before anything is decided”
Roxanne Mashari, lead member of employment and skills told the Times the policy is aimed at ensuring that professionals living in Brent a good quality of life.
She continued: “This plan will ultimately save the council money. A lot of funds go toward helping people in poverty, whereas this policy is aimed at tackling the root of the problem.”
Veolia, Brent Council’s cleaning contractors, agreed to pay their staff the wage in their latest deal with the council –while saving the local authority £1m a year according to Cllr Mashari.
Under the plans, town hall bosses will seek to use the LLW as a key negotiation factor for outside companies bidding for council contracts.
The chief financial officer estimates the policy will leave the council at least £6m out of pocket.
Cllr Mashari, who also represents the Welsh Harp ward, said that the cost would be spread out over the years, once individual contracts have expired.
Supporting the proposals, Sujata Aurora, of Brent Fightback, said: “It is ludicrous that so many working people still live in poverty because their employers pay so poorly, so Brent Council’s increased commitment to the Living Wage is very welcome.”