Brent Council have become the first in the country to approve a scheme that offers business rates discounts as an incentive to pay the Living Wage.
Some of the capital's lowest-paid workers, in the borough which is home to the national football stadium, could get pay rises of around £2.50 an hour after the Brent Council cabinet approved 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.
Brent Council already pays all of its directly employed staff the Living Wage. But it has now been agreed 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 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 new policy 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:
It’s fantastic to see Brent Council champion the Living Wage in such a practical way, supporting businesses in their borough who are showing leadership around tackling low-pay. We hope that many more councils will follow the example set in Brent and promote the Living Wage as a route to helping working families out of poverty.
It is anticipated that up to 200 businesses in Brent could benefit from this policy.
The cost of awarding any discount would be shared between central government (50%), GLA (20%), and Brent Council (30%) and the cost of implementing the policy is being met by existing budgets.