Local government can do more to boost wages

Last month the Joseph Rowntree Foundation reported that millions of households cannot make ends meet despite at least one adult working full-time. Their research found that 2.6 million households, or 60% of those where the total income is below the charity’s minimum income standard, included at least one working adult.

At the same time, child poverty statistics predict worrying increases in poverty levels. The number of children living in poverty is forecast to be 3.8 million by 2020, up from 2.3 million.

As a local Labour councillor it’s no secret that I firmly believe government could and should do more to stop this. But I also believe there is a strong leadership role that local councils can take to help make things better for local people. Local councils and the people that lead them have a position of responsibility and it’s up to us to try new and different ways to boost the economy and make things better for people.

‘We’ll be the first core city to introduce

a living wage business rate relief’

We’ll be the first core city to introduce a living wage business rate relief and we’re calling on others to consider implementing similar schemes.

By putting money in people’s pockets, we directly tackle poverty and give the local economy a boost – as people on lower incomes spend more of their money in the local economy. I’m proud that Sheffield Council is offering a business rate relief to employers who become accredited with the Living Wage Foundation and pay their staff the living wage. We’re looking to award up to £500,000 in discounts and are hoping to reach small employers in particular.

This is undeniably about making things easier for people on low pay. But it’s also about making places more business friendly, and studies have shown introducing the living wage enhances the quality of work and has a positive impact on absenteeism rates, recruitment and retention.

The living wage is an important tool in developing a prosperous and inclusive economy and in Sheffield we have a strong record. We were among the first big cities to pay the living wage to our staff and have promoted it through our procurement process. Now we are working hard to encourage other employers in the city to pay the living wage.

And by the ‘living wage’ we mean the rate set by the Living Wage Foundation based on the basic cost of living in the UK. It’s not the new minimum wage set to come into effect next month, which is confusingly also called the ‘national living wage’.

We do this because it means more money in people’s pockets. The Living Wage Foundation rate outside London is currently £8.25 per hour, which is £1.05 more than the new national minimum wage. For a full-time employee this extra pay is worth almost £2,000 each year and this can make a big difference.

Our proposals for the Living Wage business rate relief are being developed and we’re looking to introduce the scheme early in the new financial year. I hope others follow suit and cities come up with more innovative ways to boost wages for the low paid and achieve economic growth. As local leaders it’s up to us to make this happen.