“Low paid local government workers are worse off now than they were in 2010”. This is one of the shock findings of a study into the impact on workers’ living standards as a result of changes to in-work benefits coupled with the pay freeze . The National Policy Institute report reveals that this devastating combination means that, even an immediate pay rise to the level of a Living Wage in 2013 would not, in itself, lift recipients out of low pay.
The report assessed how as many as 315,000 low paid local government workers – those earning less than the Living Wage – have been affected by welfare reforms. It shows how these changes, combined with the below inflation pay increase, have reduced disposable income and caused local government workers to be worse off than they were three years ago.
Heather Wakefield, UNISON Head of Local Government said:
“This is a very sorry story for the lowest paid local government workers who usually need benefits and tax credits to keep their families out of poverty. Three years of pay freezes coupled with changes to in-work benefits is a double whammy causing workers to move backwards instead of forward.
“Cuts to local government funding, alongside cuts to pay and in-work benefits, will continue to make matters worse for ordinary hard working families. We need a significant rise in pay levels to recognise our members’ vital contribution to local services, boost consumer confidence and help revive the economy.
“The government and local councils can’t have it both ways – they are overlooking the problem that is on their own doorstep.”
Local government pay was frozen in 2010, 2011 and 2012, with the measly 1% pay rise and the removal of the bottom pay point in 2013 failing to come anywhere near the level of inflation. In addition, those earning less than the Chancellor’s ‘low pay’ threshold of £21,000 were not awarded the government’s promised £250 in 2011 and 2012.
On top of this, a number of benefits that can be claimed by low paid workers have been changed.
The NPI report also takes into account all other relevant changes within both the benefit system (such as the up rating of thresholds) and the tax system (notably the £2,965 increase between 2010-11 and 2013-14 in the income tax personal allowance).
Notes to Editors:
1. Low pay is defined as less than the Living Wage of £7.45.
2. The report focuses on the following reforms – ‘Bedroom’ Tax; Local Housing Allowance caps; Council Tax Support; Childcare costs eligible to be paid through tax credits; 24 hour rule for tax credit entitlement.
3. The research used ‘model’ households that could be affected by welfare reforms.
4. A copy of the report is available from the UNISON press office.
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