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

Virtual School Advisory Teacher

London Borough of Richmond upon Thames and London Borough of Wandsworth
£43,545 - £52,767 per annum
Virtual School Advisory Teacher
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth

Professional Services Partnering Manager

Derbyshire County Council
Grade 13 £49,178 - £52,937 per annum
Are you passionate about infrastructure, partnership management and making a real impact? Derbyshire
Recuriter: Derbyshire County Council

Business Architect

Essex County Council
£60049 - £70645 per annum + Hybrid working, Flexible working
Please note this vacancy is available as a fixed term contract or secondment opportunity for up to 12 months.Join a Council Shaping the Future of Pub England, Essex, Chelmsford
Recuriter: Essex County Council

Electrical Manager

Derbyshire County Council
Grade 12 £44,433 - £47,925 per annum
Are you ready to take on a pivotal leadership role in managing electrical systems across Derbyshire’s highway network? Derbyshire
Recuriter: Derbyshire County Council

Senior Service Product Manager

North Yorkshire Council
£47,181 - £51,356 per annum
Do you have experience in product management are looking to build your expertise? Harrogate, North Yorkshire
Recuriter: North Yorkshire Council
Linkedin Banner