Chris Mahony 21 June 2022

Rising wage bill could lead to service cuts

Rising wage bill could lead to service cuts image
Image: Small365 / Shutterstock.com

Government pledges on the National Living Wage (NLW) could cost councils at least £400m over the next two years and force further service cuts, the Local Government Association (LGA) has warned.

The Low Pay Commission has suggested the NLW could rise from £9.50 this year to somewhere between £10.58 and £11.33 from April 2024.

This higher figure would represent a 19% rise in two years – on top of the 6.6% rise absorbed by employers in April.

The LGA estimates that 35% of local government staff could end up paid no more than the NLW by 2024 unless additional funding is secured.

Chair of the LGA’s resources board, Andrew Western, said: ‘Staff pay makes up a huge proportion of councils’ costs and it is clear that the rising cost of living is going to have a huge knock-on impact on pay pressures for local government.

‘The forecasted sharp rise in the NLW – if unfunded – would hit council budgets hard and put services at risk.’

'Only by fully funding the cost, can central government ensure councils can continue to protect vital services - such as adult social care, homelessness support, collecting bins and filling potholes – and the jobs of the public sector workers that deliver them.'

A spokesperson for the Department for Levelling Up, Housing and Communities said: ‘We are working with the sector to understand the impact of emerging challenges on councils and stand ready to speak to any council that has concerns about its ability to balance its budgets.’

SIGN UP
For your free daily news bulletin
Highways jobs

Head of Education

Knowsley Metropolitan Borough Council
£87,117- £93,978
Knowsley Council is an award-winning Local Authority, named Local Authority of the Year in the Municipal Journal Awards 2024. Knowsley (Metropolitan borough), Merseyside
Recuriter: Knowsley Metropolitan Borough Council

Service Managers – Children's Social Care

Knowsley Metropolitan Borough Council
£61,863 - £67,592
Knowsley Council is an award-winning Local Authority, named Local Authority of the Year in the Municipal Journal Awards 2024. Knowsley (Metropolitan borough), Merseyside
Recuriter: Knowsley Metropolitan Borough Council

Head of Commercial Services

Trafford Council
£77,339 - £83,714
Few boroughs have a story quite like Trafford’s. Trafford, Greater Manchester
Recuriter: Trafford Council

Head of Greater Manchester Shared Services

Trafford Council
£77,339 - £83,714
Few boroughs have a story quite like Trafford’s. Trafford, Greater Manchester
Recuriter: Trafford Council

Director of People and Organisational Culture

Sheffield City Council
£Competitive
Sheffield is a place like no other. Sheffield, South Yorkshire
Recuriter: Sheffield City Council
Linkedin Banner