Living wage will cost us millions: Walsall Council leader

Councillor Mike Bird thinks the cost will spiral as the changes will apply to contractors the cash-strapped council uses, not just its own staff.

A report prepared for Walsall Council's appointments board, who made the decision over the living wage, stated that the changes would effect 187 full-time and 188 part-time council staff currently earning less than the living wage.

But, with the new £8.25 an hour rate having to apply to contractors as well, the changes could affect thousands across the borough.

Councillor Bird said: "We're going to follow the living wage yes. We will review it annually as we have to with certain financial situations but it's only right and proper that we do it. Everybody deserves to be paid the living wage.

"This will probably end up costing us many millions of pounds as it effects the contractors we use as well. It's all well and good but government doesn't get the impact on local authorities.

"It's part of our responsibilities, everybody should be paid a living wage. But it's having a knock on effect.

"The living wage is meaning that the local authorities are having to find the money from somewhere and that's impacting on social care.

"Some people don't look after the elderly, they just want to shut them away."

Currently, the 375 council employed staff who will be affected by these changes are earning between £7.06 and £8.05 an hour.

The changes will also apply to council run schools, but not voluntary aided, foundation and academies. Apprentices will also be excluded.

The increase will come into effect on April 1.

As well as the concerns over the actual cost to the council, a leading economic expert has warned the UK this week that the implementation of the National Living Wage could lead to job losses.

Sir Christopher Pissarides, who was awarded the Nobel prize for economics in 2010, has told the World Economic Forum in Davos, Switzerland, that the implementation will be a 'threat' as companies will not re-distribute profits, if a job is costing them money then they will cut it.

When making the decision earlier this month, the appointments board had the choice whether to keep following the living wage meaning a rise to £8.25, freeze the current pay at £7.85, or scrap the living wage all together.

They voted unanimously for the rise.