We live in a time in which all major political parties are proclaiming the benefits of devolution. However, for this rhetoric to have meaning local communities need to be given real powers to improve the social and economic wellbeing of the people who live there. This must include the power to address poverty pay.
Preston City Council was the first accredited Living Wage employer in the north of England in 2012 and we persuaded many others employers to follow our lead. Preston is now ranked in the Top 10% of local authority areas in the North West of England for part time female employees receiving the Living Wage or above. Good progress but the reality is 22% of Preston's workforce are still paid less than the Living Wage.
This shows a voluntary approach can only go so far and it is why Preston City Council is minded to ask government for powers under the Sustainable Communities Act to compel every employer within a local authority area to pay the Living Wage. The rate of the Living Wage would be determined by the Living Wage Foundation (currently £9.40 an hour in London and £8.25 an hour outside London) and not the recently announced 'National Living Wage' which is significantly less than the level of the full Living Wage.
Every local authority that used this power could see a windfall of millions of pounds through higher taxation and less subsidy of low pay from in work benefits. It would see more money circulating in our local economies benefiting our communities as well as the workers themselves. This increase in revenue for the Treasury could be put to good use enforcing the Living Wage locally and helping smaller businesses especially with the transition to higher pay.
Myself and many others believe the Living Wage should be set statutorily across the whole country but if government refuses to do this local authorities should be empowered to set a compulsory living wage following the experience of many cities in the US like Seattle. But regional pay this will not be as rates inside and outside London are set nationally by the Living Wage Foundation based upon calculations of what is needed to have a decent living existence.
The work of many Councils across the country in promoting the Living Wage has been outstanding but if we want to tackle the scourge of poverty pay we have to go further. The beauty of the Sustainable Communities Act is when a submission is made government must take it seriously and if the proposal is selected for resubmission the Secretary of State is legally required to reach agreement with the Councils who submitted it. This is a great opportunity to begin a revolution against low pay in our communities and the more Councils who put their name to this submission the more chance it might happen. Please join us in this exciting new initiative.
Guest Blogger: Councillor Matthew Brown is Cabinet Member for Social Justice, Inclusion & Policy on Preston City Council