The Council at its meeting on 18 July 2011 resolved to support a non-consolidated £250 payment to those employees earning below £21,000 (Council Minute No. 25 refers).  A report by the Director of Finance set out, in detail, how those employees whose full time equivalent salary was less than £21,000 per annum could be paid a £250 lump sum, net of income tax, employee’s national insurance and superannuation, as a pay award in 2011-12.  He also informed that he had been asked to consider how schools could be compensated for the additional impact of delivering such net sum payments.

Councillor S Foulkes made the following statement:

“I want to talk for a moment about the position of low paid workers, inside and outside this Council. The opposition made a concerted attempt at Council on Monday night to portray this administration as being opposed to increasing pay for low paid workers. Nothing could be further from the truth.

They have absolutely no right to take the moral high ground here. It was a Labour Government that introduced the minimum wage, against fierce opposition from the Tories.

It was a Labour government that specifically targeted funds like the Area Based grant at authorities with high levels of deprivation, and it was a Conservative/Liberal Democrat government which abolished those funds, to the very real detriment of this Council.

It was the Conservative Liberal Democrat administration locally that chose not to do anything on the low pay issue last year, although it was well within their power to do so.

Monday night was political grandstanding of the worst kind, with this Council’s lower paid workers as the pawns in the middle. That is not acceptable, and I can only apologise to any staff who feel they were caught up in the middle of this.

Imposing any kind of arbitrary cut off for pay increases can create all kinds of anomalies, which we were seeking to explore responsibly as an executive in order to provide as fair a solution as possible and avoid a situation where one worker is pitted against another.

Over the long term, the issue of low pay and its consequences are matters for discussion with the Unions, and also for discussion within the Council.

These are matters which need to be considered as part of our anti-poverty strategy.

They need to be considered as part of our Public Health Agenda, where poverty is a crucial factor in the staggering 10 year mortality gap between the poorest parts in the East of the Borough and the wealthiest parts in the West of the Borough.

They need to be considered in the context of the Council leading the way to other employers.

These are discussions we must and will have.

So here’s what we are going to do.

«  We will pay a lump sum of £250.00 to each low paid worker earning less than £21,000. Frankly, at this point, a lump sum will be more useful to our staff than an extra, non consolidated, few quid a week.

«  We will pay this sum net of tax, national insurance and pension which means the staff will actually receive £250.00 and the Council will bear the cost of tax and NI

«  We will treat each payment separately in order to ensure that no one is disadvantaged due to their individual financial circumstances.

«  We will agree this now, tonight, no delays or further reports. To that end I have asked the Director of Finance to prepare me a special report on the details which will allow this Cabinet to take the decision.

«  I will table this report, with a formal resolution, now.

The issue of the Living Wage, to which we are very sympathetic, is more complex, particularly as we have just completed a job evaluation exercise, and we need to explore how it can be delivered without creating a knock on to other, more highly paid, posts throughout the Council. To that end we will refer this to the relevant officers to bring a more detailed report back to Cabinet following discussion with the Unions.

I have recently set up a new group which brings together the Council’s Chief Executive, Head of HR and the Trade Unions, which I will personally lead, in order to help us work together constructively in the coming year. I will also make sure that the issue of low paid workers forms part of those discussions.”

The Interim Director of Children’s Services was asked to provide an explanation in respect of the School’s Budget.  He informed that the £250 issue had been flagged up with Schools in December 2010.  A report had been taken to the Schools Forum in January 2011.  There had been a recommendation to move £2.3m around in the Schools’ Budget.  A report needed to reassure Schools that all items had been provided for and provision did not mean ‘new money’.

RESOLVED: That

(1)  those employees whose full-time equivalent salary is less than £21,000 per annum be offered a   non- consolidated additional lump sum payment net of income tax, national insurance and pension contributions, of £250 for 2011-12 to be paid no later than December 2011.  The   operational details of the arrangements for these payments shall be determined by the Chief  Executive (in consultation with the Leader of the Council, the Director of Finance and the Director of Law, HR and Asset Management) following consultation with the Trade Unions;

(2)  it be recommended to Council that an amount of £190,000 be transferred from the General Fund Budget to the Schools Budget;

(3)  officers be requested to report to a future Cabinet meeting on the implications of bringing those Council employees earning below £7.20 per hour up to that level of pay (referred to as a living wage); and

(4)       In the light of the statement by the Leader of the Council above, and in the light of the need to   make the position on a pay award to low paid workers perfectly clear, this Cabinet agrees:

(a)  To pay to all staff earning less than £21,000 the lump sum of £250 pro rata, net of tax, national insurance and pension.

(b)  To compensate the schools for the additional cost of providing a sum net of tax and insurance.

(c)  To ensure no one is disadvantaged by the payment of this sum.

(d)  To refer the issue of paying a Living Wage to the relevant officers to bring a more detailed report back to Cabinet on the best way forward.

(e)  To accept these recommendations in tandem with the recommendations and contents of the report drawn up by the Director of Finance at the Leader’s request.