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BIRMINGHAM CITY COUNCIL

Living Wage Policy

1.0 BACKGROUND

1.1 The Leaders Statement in June 2012 communicated the intention to introduce theLiving Wage, as part of a Business Charter for Social Responsibility, for Councilemployees and the promotion of this amongst Birmingham businesses.

The Living Wage will help individuals and families, and boost the overall wellbeingofBirminghams citizens. It is also aimed at boosting productivity, and improvingthe quality of work. Much of the money will be recycled back into the Birminghameconomy.

1.2 The Living wage Policy will ensure that people working on behalf of the Councilare paid the same minimum rate as if they worked directly for the Council. Wealso believe that since our procurement policies mean that more of them will beBirmingham residents, then putting more money into those peoples pockets willhelp local shops and businesses, creating a virtuous spiral that can treble itsvalue to the local economy. And there is plenty of evidence that paying the LivingWage boosts flexibility and performance, reduces sickness and aids staffretention.

2.0 WHAT WE MEAN BY LIVING WAGE

2.1 The Living Wage within the UK (excluding London) is currently 7.45 per hour. Itis set independently by the the Centre for Research in Social Policy atLoughborough University. It is increased annually in November and themethodology used to calculate the Living wage is based explicitly on actual costof living. The Living Wage is not a statutory requirement but a voluntaryundertaking.

2.2 The Living Wage is intended to recognise the dignity of work and the importancefor individuals, families and society of people being able to earn a living.The idea is rooted in notions of contribution, reciprocity and community.

For employees, the Living Wage means no longer having to work multiple jobs,getting some sleep and being able to provide for and spend time with their family.

For employers, it means higher staff morale, better quality work, improved ratesof retention, lower rates of sickness and absence, and reputational gain. For localauthorities, it can mean more money being spent by local employees in the localeconomy.

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3.0 THE POLICY CONTEXT

3.1 The strategic context for the Living Wage policy derives from the following keyCouncil policy drivers:

Leaders statement (June 2012), specifically:

a) To tackle inequality and deprivation, promote social cohesion across allcommunities in Birmingham, and ensure dignity, in particular for ourelderly and safeguarding for children.

b) To lay the foundation for a prosperous city, built on an inclusiveeconomy.

c) To involve local people and communities in the future of their local areaand public services a city with local services for local people.

Giving hope, changing lives (the Social Inclusion green paper).

The Living Wage Policy is one of the key policies that will help to achieve theCouncils key priorities.

4.0 IMPLEMENTATION

4.1 The Council applied the Living Wage to their employees in July 2012 and hasbeen paying all directly employed staff the Living wage since that date.

4.2 In November 2012 the Council obtained Living Wage employer accreditationwhere it committed to work towards the adoption of the Living Wage within itssupply chain.

4.3 We will therefore require, to the extent permitted by law, that anysupplier/contractor who supplies an employee (other than an intern or apprentice)who provides a service or completes works, involving 2 or more hours of work inany given day in a week, for 8 or more consecutive weeks in a year on:

Council premises; and/or

Property owned or occupied by the Council; and/or

Land which the Council is responsible for maintaining or on which it isrequired to work

will pay employees the Living Wage.

4.4 To start to achieve this we will ensure that temporary workers hired through ourcontracted agencies are paid the Living Wage from 1 April 2014.

4.5 Achieving the Living Wage outside the Council will be through the BirminghamBusiness Charter for Social Responsibility. All future commissioning andcontracting decisions will take account of the principles of the Charter and its

adoption will form part of the terms of new Council contracts, and Conditions ofGrant Aid (COGA).

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4.6 A supplier with any new contract over 200,000 aggregated annual value, or asupplier with over 500,000 aggregate annual contract value for services, worksor contracts which are not solely goods, will be required to pay the Living Wage.Any supplier/contractor not willing to apply the Living Wage will be deselected atpre-qualification stage.

4.7 We will sign up existing suppliers who have confirmed they are willing to apply theLiving Wage voluntarily within their organisation and include a variation to thecontract to meet the Living Wage requirements and set a timetable forimplementation.

4.8 The Council will itself increase the amount it pays to affected employees by thesame amount as any increase to the UK Living Wage, within 6 months of the dateon which any increase in the UK Living Wage is officially announced, and willrequire all suppliers/contractors to do the same.

4.9 Where the application of the Living Wage is not considered to be appropriate this

will need to be justified and approved by the Cabinet Member for Commissioning,Contracting and Improvement. Strategy and Award reports that are notadvocating the application of the Living Wage will not be eligible for inclusion inthe delegated procurement report process irrespective of the value.

4.10 Social Care is an area where other local authorities have found applying theLiving Wage hardest to achieve. The UKs current social care industry is whollypredicated on a low-pay business model. Most of the costs of a social carecontract are staff costs. Increasing carers wages is therefore genuinelyproblematic and will require both cross-border collaboration and time.

4.11 A review of the Councils current Social Care contracts has identified potentialincreased costs of circa 11m pa if living wage is to be applied (this does notinclude personal budgets). This is reflected in the Council Business Plan andBudget 2013+. Commitment to this wider extension of the Living Wage isdependent on the outcome of the Councils Service Review process and legalclarifications and will be considered as part of future budget setting processes.Social Care contracts are outside the scope of the Living Wage License.

5.0 REPORTING ON LIVING WAGE

5.1 Birmingham City Council will:

a) Report and promote the suppliers/contractors who have adopted the Livingwage within their organisation and supply chain.

b) Monitor contracts to check that suppliers continue to pay the Living Wage,especially after the annual uplift which takes place every November.