Higher wages for council employees would save the Treasury money, says UNISON

Higher wages for council employees would save the Treasury money, says UNISON

The Treasury would save half the total cost of awarding council workers the pay rise called for in the 2018 claim put to the Local Government Association, according to new research published today (Thursday) by UNISON.

The claim, submitted in May 2017, calls for a 5% pay rise and the real living wage for the lowest paid (£8.75 an hour or £10.20 in London).

If council employees were given a decent pay rise, they would be paying more in taxes and national insurance, spending more and paying VAT, as well as claiming less in tax credits and other benefits, according to the research.

The research, carried out for UNISON by New Policy Institute (NPI) shows that although the 2018 pay claim would mean a wage bill of £623m for local authorities, more than half the cost would be offset by tax gains and benefits savings of £242m a year for the Exchequer.

But if council staff were to receive a 5% pay rise, the government would pocket £71m in higher employer national insurance contributions, £128m in tax revenues and would save £43m by paying out less in benefits and tax credits. A further £68m would be recouped through the extra VAT on increased spending.

When all these savings are taken into account, the research says this would reduce the cost of the three local government unions’ pay demands from £623m to £381m.

The unions – UNISON, GMB and Unite – are hoping to receive a pay offer from the local government employers next month.

UNISON head of local government Heather Wakefield said: “Local government workers are the lowest paid in the public sector. This pay rise is affordable and long overdue. With inflation and interest rates on the rise, all council employees want is to be able to pay their bills, feed their families and live without constant financial worries.

“As council budgets are slashed and pay continues to be held down, councils are finding it hard to retain and recruit, as staff leave for better paid jobs elsewhere.

“In next week’s Budget, the Chancellor has the opportunity to put an end to poverty pay in local government and ensure staff are given a fair pay rise.”

Notes to editors:
The NPI research is available here.
The 2018 pay claim covers council staff in England, Wales and Northern Ireland.

UNISON media contacts:
Fatima Ayad T: 020 7121 5255 M: 07508 080383 E: f.ayad@unison.co.uk
Liz Chinchen T: 020 7121 5463 M: 07778 158175 E: l.chinchen@unison.co.uk

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