02.06.14
Government must take lead as living wage employer
More than 1,600 directly employed staff in Whitehall are paid below the living wage, according to new figures from the Smith Institute.
The study – ‘Setting a fair pay standard: the government as a living wage employer’ – revealed that the overall cost to the public purse of paying Whitehall’s lowest paid workers the living wage would be £18.3m per year, only 0.002% of total public spending.
Paul Hackett, director of the Smith Institute said: “Paying the living wage to these 30,000 government workers would [cost] only slightly more than what the Foreign Office spends each year on boarding school fees for diplomats’ children.”
In his foreword to the report, he adds: “Even at a time of fiscal austerity, this seems a small price for HM Treasury and a significant gain for the cleaners and other low paid staff who work for government departments.”
It has been estimated that the cost of paying the living wage to the 1,618 low-paid staff who are directly employed by government departments would be £1.1m per annum (after increased tax take and reduction in in-work benefit payments).
The study, which is the first of its kind to analyse how many staff in Whitehall are paid below the living wage, also revealed that the cost of paying the living wage to the 5,650 hired contract staff across Whitehall – 87% of whom are in the Department for Work and Pensions – would be £5.1m pa (after tax and benefit savings).
The £18.3m figure covers is the total cost of paying the living wage to the 31,413 workers who are directly employed by government departments as well as staff contracted in and employed indirectly via government contracts (after tax and benefit savings and including the contractor paying 21% towards the extra cost).
Hackett added: “The government should lead the way and pay its low paid workers the living wage, as it promised to do. Even at a time of fiscal austerity it is a small price for a big gain for the cleaners and other low paid workers in government departments.”
Data on the number of direct central government department employees paid below the living wage were obtained from a Freedom of Information request by the Labour Party carried out in March 2014.
The Smith Institute has now called on the government to take a lead on ensuring its staff across Whitehall are paid a living wage.
However, a Cabinet Office spokesperson told PSE: “We do not recognise these figures and believe that there may be methodological and analytical errors. The government is committed to attracting and retaining the best and brightest with a modern employment offer.”
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