According to David Cameron, the living wage is an idea “whose time has come”. Yet despite his backing central government departments have yet to become living wage employers. If the living wage was really a priority for central government then it is not unreasonable to ask why is it not itself a living wage employer? If government aims to promote the case for extending coverage should it not be leading by example? As the recent Buckle review on low pay has noted: “Central government should also learn from the experiments by local authorities to use the power of procurement to encourage more employers in the private sector to pay a Living Wage.”
This research paper aims to show how much (or indeed, how little in the scheme of government spending) it would cost to pay all low paid workers in Whitehall (including those employed indirectly through public procurement) the living wage. By setting out the cost of scaling up living wage coverage the paper hopes to add to the increasing body of evidence about the living wage. It also adds to the debate about using living wages as a social policy instrument to tackle low pay. Introducing living wages clauses, for example, when contracting-out services could be a critical plank in a future government’s policies to reverse the trend of in-work poverty.
The evidence is clear – the headline cost of paying all 31,413 Whitehall staff in the UK the living wage would be £18.3 million pa (including a contribution from the contractor). Even at a time of fiscal austerity this seems a small price for HM Treasury and a significant gain for the cleaners and other low paid staff who work for government departments.