Agenda item

The City Barrister and Head of Standards submits a report to update the Overview Select Committee on progress on implementing the Living Wage through Procurement for contracts and services not delivered in house by the Council, and the implementation into the Council’s procurement procedures.

The Committee is recommended to note and comment upon the contents of the report.

The City Barrister and Head of Standards submitted a report which updated the Committee on progress on implementing the Living Wage through procurement for contracts and services not delivered in house by the Council, and the Council’s procurement procedures.

The report was introduced by Councillor Myers, Assistant City Mayor (Jobs, Skills, Policy Delivery and Communications). It was noted the wages in Leicester were below the national average, and the motivation for the authority was to have Real Living Wage accreditation, and for the estimated 40k people directly employed by public sector across the city to be paid at least the Real Living Wage.

It was further reported that, as a procurer, progress had been made and that proportionally more contracts secured were compliant. It was a timely report as the authority was in process of reviewing suppliers. The long-term growth strategy in response to the pandemic and economic situation now faced had to be built as much as possible on well paid, sustainable sectors. It was noted there was an emphasis on well paid sectors such as Tech and Science, and to support people to enable them to be employed in those sectors, but also to look at the less well paid sectors such as catering and hospitality to support them to raise wage levels.

The ambition was to enable as many organisations in the city to become accredited as Real Living Wage employers.

The report was presented by Colin Sharpe, Deputy Director of Finance, and the following points were made:

·         The Real Living Wage (RLW) was calculated independently by the Living Wage Foundation (LWF) and was currently at £9.50 per hour, 59p above the National Living Wage (the legal minimum wage) at £8.91.

·         There was various criteria for employers to become accredited as a Living Wage Employer set out at 3.4 in the report.

·         Processes had been implemented to assess whether contracts met criteria for the Real Living Wage prior to them being let for procurement.

·         Agency staff engaged by the Council for more than eight weeks were paid at the Real Living Wage level.

·         An exemption was negotiated for social care contracts due to affordability implications and pressure on Adult Social Care funding.

·         The Council’s PFI contracts for waste and schools were let before the Council’s Living Wage accreditation. It was thought that most staff employed by the contractors were paid above the National Living Wage, however confirmed data was not to hand.

·         Contract monitoring was receiving further work, and audits could be requested with contracts to check Real Living Wage compliance.

The Chair said he was shocked when he read the report that for the most needy of services, proper wages could not be afforded.

Members then provided comment on the report:

·         It would cost extra to pay the social care services the Living Wage. It was asked when it was felt it could be achieved, but noted it would require broader discussion.

·         It was a valid conclusion to reach that in terms of adult social care contracts, the break down would show the lower value contracts would be paid at Real Living Wage, rather than then larger more complex contracts employing a majority of lower paid staff.

·         It was a commitment made by the authority that it would consciously move as many contracts as it possibly could to paying the Real Living Wage.

·         For people directly employed by the Council above a certain age, all were receiving Real Living Wage as a minimum, and different tiers, for example, apprenticeships were always higher than the national one.

·         With regards to how the apprenticeship offer for looked after children, and how it could be better supported with living costs, a bursary towards living costs was being looked at.

·         In terms of the PFI contracts it was presumed when they were renegotiated, the Real Living Wage would be included in new contracts.

The City Mayor agreed with comments made by Members of the Committee, particularly on the social care sector, but in order to pay all contracts the Real Living Wage, there would have to be savage cuts made to other services in the city.

Councillor Russell, Deputy City Mayor (Social Care and Anti-Poverty) said people in society as a whole needed to recognise the cost of social care, and that adding a precept on council tax did not recognise the full cost of social care, and that the social care budget was no longer just for people over a certain age but was more and more being spent on people of working age. She added the national government needed to recognise that a progressive taxation system was needed that would pay for all social care and that people that provided it should be recompensed, should be paid more than the Real Living Wage, and that care should be recognised for the value it really deserved.

The Chair agreed it was a terrible situation people could not be paid the wage they deserved.

Members asked that projections be provided to them on 3.12 in paying the Living Wage to the remaining ten contracts, with a break down preferably by bullet point and then by global figure. It was also asked if feasible or if it already did, that the Council in order to protect its reputation included in its contracts a get out clause that could be used a revocation of those contracts if, for example, an organisation was found to have poor labour practices.

The Deputy Director of Finance responded that the figure of £3.5million for adult social care contracts had already been mentioned by Members and confirmed figures would be circulated to Members following the meeting.

He added that with regards to the possibility of protection of reputation clause in contracts, he was sure there would be clauses to protect the authority against certain deficiencies in contract delivery, but would be taken back as an action and information provided to Members following the meeting.

The Deputy Director further noted that PFI contracts were very complicated. It was stated that the authority had recently completed the quinquennial benchmarking of the facilities management services at the four PFI schools and that now could be an opportune time to ask questions on the Real Living Wage. It was further noted that Biffa had reportedly been paying its lowest staff on the waste PFI contract somewhere in between the National Living Wage and Real Living Wage.

The Chair noted the actions to be taken back and noted the subject would be revisited as an ongoing situation.

AGREED:

1.    That the report be noted.

2.    A further report would be brought to a future meeting of the Committee.

3.    Officers to look at the issue of social value to be added to contracts.

4.    That a break down of the remaining ten contracts at 3.12 in the report and costs associated with paying the Real Living Wage to them be circulated to Members of the Committee.