Businesses in north-west London could be the first in the country to be offered business rates discounts as an incentive to pay the ‘living wage’ in a move being considered by Brent Council.
Some of the capital’s lowest-paid workers, in the borough which is home to the national stadium, could get pay rises of around £2.50 an hour after the council signalled its intention to offer firms in the borough up to £5,000 off their business rates – if they become living wage accredited employers.
It is estimated that around 30% of Brent residents are currently earning less than the living wage which is an informal benchmark based on the amount a person needs to earn to cover the basic costs of living. This week the new rate was announced as £9.15 an hour in London and £7.85 an hour in the rest of the UK. The national minimum wage, which is set by the chancellor, is significantly lower at £6.31 an hour for adults, and £5.03 for those aged 18 to 21.
Brent Council already pays all of its directly employed staff the living wage but town hall bosses said today (Nov 5) that they are now considering an idea to offer businesses a one-off discount on their business rate equivalent to five times the cost of being accredited as a Living Wage Employer by the Living Wage Foundation. The cost of being accredited with the Living Wage Foundation varies depending on the size of workforce and the type of organisation but the maximum discount could be up to £5,000. In addition, living wage accredited businesses will be championed on the council’s website and receive a personal visit from a senior member of the council to officially recognise their accreditation.
Councillor Roxanne Mashari, Cabinet Member for Employment and Skills at Brent Council, said: “We are committed to championing the living wage and tackling the root causes of poverty in our borough. We know that paying the living wage makes good business sense as it incentivises staff and helps to recruit and retain the best people, whilst reducing absenteeism. This package of proposals announced today aims to create a further incentive for businesses in Brent to take the step towards paying their staff the living wage.
“Many hard-working people on low wages struggle to make ends meet and it is up to councils like ours to do everything we can to ensure that a fair day’s work leads to a fair day’s pay.”
Rhys Moore, Director, Living Wage Foundation, said: “Brent Council is showing great leadership on the Living Wage. Local government has an important role in supporting businesses to do the right thing and help low paid employees out of in-work poverty.”
It is anticipated that up to 200 businesses in Brent could benefit from the idea which is set to be formally considered by town hall bosses at a Cabinet meeting in January.
The cost of awarding any discount would be shared between central government (50%), GLA (20%), and Brent Council (30%). Brent has been shortlisted for a Living Wage Champion Award by the Living Wage Foundation and is also supporting Living Wage Week – which takes place from November 2-8.
The proposals would see the costs met by existing budgets.