Laura Sharman 23 November 2016

Autumn Statement: Councils facing £337m costs over new living wage

Councils are expecting to fork out an extra £337m a year after the minimum wage was increased to £7.50 an hour in today’s Autumn Statement.

Chancellor Philip Hammond confirmed the National Living Wage (NLW) for all those aged over 25 would be increased by 4% in April 2017.

The move is expected to mean a pay rise for over one million workers, with the chancellor stating it would deliver a yearly pay rise worth over £500 to a person in full time employment.

The Government is aiming for the NLW to reach 60% of median earnings by 2020.

Mr Hammond said: ‘We recognise that more needs to be done to help families make ends meet and to ensure every household has opportunities to prosper,’ the chancellor added.

However, figures from the Local Government Association show that the NLW will cost councils at least £337m in 2016/17. The analysis by the LGA also shows that by 2020 - when wages are set to be £9 an hour - this could cost councils £111m.

There have also been warnings that the NLW will create a ‘pay crunch’ in the social care sector, with one million care workers likely to see increases in their salary. The Resolution Foundation has calculated the new wage would leave a funding gap of around £1.4bn in the sector.

SIGN UP
For your free daily news bulletin
Highways jobs

LGV Driver

North Yorkshire Council
£34,094 - £37,225 per annum pro rata
Would you like a rewarding role that allows you to work outside in some of the most scenic places in the country? Harrogate, North Yorkshire
Recuriter: North Yorkshire Council

Mobile Cleansing Operative

North Yorkshire Council
£24,796 - £25,989 per annum
Are you passionate about keeping communities clean and welcoming? Harrogate, North Yorkshire
Recuriter: North Yorkshire Council

Social Worker - Adopt Thames Valley

Oxfordshire County Council
£38220 - £45091
This is an exciting opportunity to be part of the continued development of Adopt Thames Valley (ATV) Regional Adoption Agency. ATV launched in December 2017 and is the shared Adoption Service for Bracknell Forest, Oxfordshire, Reading Borough Council (Bri Woodley
Recuriter: Oxfordshire County Council

Executive Director of Housing

Bristol City Council
£160,505 - £190,505
Shape the future of housing in a city like no other. Bristol
Recuriter: Bristol City Council

Executive Director of Children & Families

Lewisham London Borough Council
£166,755 - £173,133
Lewisham’s Children’s Services have undergone significant transformation Lewisham, London (Greater)
Recuriter: Lewisham London Borough Council
Linkedin Banner