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.’

What’s happening inside the LGPS? image

What’s happening inside the LGPS?

Get the most informed take on the challenges and opportunities that substantial reform will bring at this year’s PLSA Local Authority Conference.
SIGN UP
For your free daily news bulletin
Highways jobs

Childcare Lawyer Solicitor

North Yorkshire Council
£37,035 - £49,764 per annum
Join a leading Legal Team in North Yorkshire! Northallerton, North Yorkshire
Recuriter: North Yorkshire Council

Highways Maintenance Manager

North Yorkshire Council
£49,764 - £53,817 per annum
We are looking for an experienced co-ordinator to join the team as a Highways Maintenance Manager Skipton, North Yorkshire
Recuriter: North Yorkshire Council

Child Protection & Safeguarding Manager-Plumstead Manor School

Royal Borough of Greenwich
Up to £23191 per annum
Plumstead Manor School Ref 108 Child Protection and Safeguarding Manager - Part time21 hours per week to be worked Wednesday, Thursday and Friday, 39 England, London, Woolwich
Recuriter: Royal Borough of Greenwich

Director – IT and Digital Transformation

Redbridge London Borough Council
£Competitive
Are you ready to lead digital innovation and transformation in one of London’s most forward-thinking boroughs? Redbridge, London (Greater)
Recuriter: Redbridge London Borough Council

Director – Community Safety and Cohesion

Redbridge London Borough Council
£Competitive
Are you ready to lead on safety, inclusion and community wellbeing in one of London’s most diverse and ambitious boroughs? Redbridge, London (Greater)
Recuriter: Redbridge London Borough Council
Linkedin Banner