Councils reject Living Wage as too costly

The authority, along with Telford & Wrekin Council, was missing from a list published by the GMB Union of 175 councils around the UK to have agreed to pay the £8.25 hourly rate recommended by the Living Wage Foundation.

The figure is distinct from the new government Living Wage, which is a minimum rate of pay currently fixed at £6.70, which is to rise to £9 by 2020.

Councils in Powys, Wolverhampton, and Cheshire East have either committed to or introduced the Living Wage, but Shropshire Council said doing so would lead to redundancies.

David Turner, the council's cabinet member for resources, finance and support, said: "A report was presented to our Employees Joint Consultative Committee in July, which considered changes to the pay structure and included consideration to move to the Living Wage.

"Adopting the Living Wage would impact 2,000 plus staff, at a cost of £800,000.

"The decision was made not to adopt the Living Wage at the present time, due to the significant savings that the organisation has to make over the coming years, as by doing so could significantly increase the number of redundancies that the organisation may have to make."

Telford & Wrekin Council said it had no up-to-date figures for how much paying the Living Wage would cost, but said it plans to conduct a similar study in the near future.

Spokesman Russell Griffin said: "Telford & Wrekin Council has given its commitment in principle to implement the Living Wage but has to balance the affordability of doing this with cuts and service provision."

Staffordshire and Herefordshire Councils are among those which are not on the list of councils committing to paying the Living Wage, which is calculated as the figure needed to meet the basic cost of living in the UK.

Justin Bowden, GMB national officer for local authority workers, said: "From the employers point of view they expect their budgets to continue to be extremely challenging under this government while demands on services are ever greater.

"However the most pressing issue is the government's new so-called National Living Wage which from next April will be £7.20 and will rise quickly each year after that to £9. The effect of this will be significant pay increases for the lowest paid and at the same time the severe erosion of differentials with those currently paid more."

He added: "Councils are saying this will need a renegotiation of the entire pay structure. GMB will continue to press for a living wage to be set at £10 per hour as agreed at GMB Congress.

"Members make clear in their experience you need at least £10 an hour and a full working week to have a decent life free from benefits and tax credits. Less than £10 an hour means just existing not living.

"It means a life of isolation, unable to socialise. It means a life of constant anxiety over paying bills and of borrowing from friends, family and pay day loan sharks just to make ends meet."