Report of the Director of Inclusive Economy.

This report details Manchester Living Wage Action Group’s work to become a Living Wage City, why this is important, and how we intend to continue promoting the real living wage in Manchester.

The committee considered a report of the Director of Inclusive Economy which detailed the Manchester Living Wage Action Group’s work to become a Living Wage City, why this is important, and how it intended to continue promoting the real living wage in Manchester.

Key points and themes within the report included:

·         Manchester announced its intention to become a Living Wage City in September 2021 and was recognised in October 2022;

·         The real living wage is set by the Living Wage Foundation and based on independent advice and was currently set at £10.90 per hour;

·         Becoming a living wage city was important for Manchester as most of the city’s significant problems were linked closely to poverty, and while worklessness and benefit dependency remained the main drivers of poverty in Manchester, there had been an increase in in-work poverty in recent years;

·         The criteria required to become Living Wage accredited;

·         The benefits for both an employer and employee;

·         Manchester was required by the Living Wage Foundation to convene a Living Wage action group to collectively develop a three-year action plan to increase the number of living wage employers in the city and to be made up of a range of accredited organisations, including anchor institutions, SME employers and the third sector;

·         The role of the action group and the action plan;

·         The targets and actions for the Action Group; and

·         Next steps of Manchester’s Living Wage journey, including handing responsibility to the Work and Skills team for delivery.

The key points and queries that arose from the committee’s discussions included:

·         If the Council had experienced any difficulties in engaging with employers due to current financial difficulties, and whether this was difficult for specific sectors;

·         Noting that voluntary, community and social enterprises (VCSE) was not typically a high-paid industry;

·         Noting a recruitment and retention crisis within employment;

·         If the Council was doing all it could within its licensing and planning policies to promote the Real Living Wage; and

·         How the Council could promote the Real Living Wage through the commissioning procedure.

The Director of Inclusive Economy acknowledged that the impact of current financial uncertainties on employer engagement with the Real Living Wage. She explained that big anchor institutions were key and the Council had asked them to encourage other employers within their sectors and spheres of influence to engage with the Living Wage Foundation.

Some challenges were noted, such as the Living Wage Foundation only recognising the headquarters of a business which caused some issues if the Manchester office of an organisation wanted to become accredited.

The Director of Inclusive Economy also explained that the Council would continue to present a video on the Real Living Wage, which members had watched earlier in the meeting, and use the levers it had to further encourage other employers to become accredited.

The Director of the Greater Manchester Good Employment Charter also advised the Committee that his organisation had surveyed members of Charter after the announcement of the increase in the Real Living Wage, and members remained committed to paying this.

The Deputy Leader informed members that the Council stipulated in funding applications for VCSE that organisations must be able to demonstrate that they either pay the Real Living Wage or had a commitment to implementing this within the next two years and MACC were supporting VSCE organisations to devise an action plan for this. 

The Director of Inclusive Economy added that MACC strongly urged VCSE organisations to pay the Real Living Wage but acknowledged the need for Living Wage funders, who could build enough into commissions and grants so that VCSE organisations could pay the Real Living Wage and then monitor it through contract and grant conditions.Some progress had been made on this, although it was noted that more work needed to be undertaken.

It was confirmed that there were no conditions around the Real Living Wage within the Council’s planning and licensing policies as there were no legal powers to enforce this.

The Strategy and Economic Policy Manager also explained that social value was already well embedded within the Council’s procurement and commissioning processes, although he acknowledged the need to ensure consistency across the organisation.

He concurred with members’ points about retention issues within the workforce and reiterated that those engaged with the Living Wage Action Group remained committed.

The next phase of work for the action group would identify levers which the Council could utilise to achieve its outcomes for the city and would help to open up conversations with different employers.

Decision:

That the Committee

1.    notes Manchester City Council’s approach to increasing the number of residents being paid a real living wage;

2.    expresses their support for the Council in using all its levers, including procurement, land ownership, civic influence and place-based lead for health to increase the number of employers paying a real living wage; and

3.    supports the Council’s ambition to increase the number of residents being paid a real living wage by promoting this work through members’ own contacts and networks.