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A District Council
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Creating a 'Fair Wage' Policy
Challenge
A London Borough Council wished to explore the feasibility of a policy to ensure that staff employed by contractors receive a fair wage. This involved a wide range of factors such as what is "fair"; what will be the impacts on other stakeholders (other councils, council taxpayers, local employers, contractors); is it legal, under the current legislation?
Solution
Oakleigh was invited to advise the Council on approaches it could adopt and to recommend a viable policy approach.
Interviews with council officials and other stakeholders gave information about the issues in various directorates. Information about the regulations affecting council procurement was relatively easy to find, of course, although it was less easy to find interpretations. More difficult was collecting information about the council's contracts, as information had to be gathered from individual departments.
To produce the advice the council needed it was necessary to analyse this information in a number of ways. Firstly a solid case justifying historically and economically the case for a fair wage policy was produced. It was necessary to look at the impact on the local labour markets. This is particularly difficult in London as there is considerable scope for labour movement across boundaries. Additionally the council is a major employer, so its actions have an impact on other employers.
Legislation supporting best value is clear that non-commercial factors can be taken into account, but how was more open to interpretation.
Finally it was necessary to model the costs and predict the impact of different policies on council expenditure. Using the council's data Oakleigh developed a spreadsheet-based employment cost model.
Outcome
The final output from the project was a report setting out a number of options and the implications of each one. This allowed the council to consider the political acceptability of each one. The favoured approach was based on affordability, using the available funds to help the lowest-paid first and giving a phased introduction.
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