South Tyneside Council is to announce its commitment to introducing the national living wage at an event to be held tonight (Friday 17 October)
The move will mean that the authority is the first in the North East to commit to working towards the implementation of the full national living wage value of £7.65 per hour (outside London).
Pending Full Council approval, from April 2015 South Tyneside Council will begin the process of introducing the living wage for around 1,000 of its work force.
Councillor Ed Malcolm, Lead Member for Resources and Innovation at South Tyneside Council, said: "As a Council we are committed to the social justice agenda and trying to bring real change to the lives of people in South Tyneside.
"This is not about giving staff pay supplement - this is about radically changing our salary structure.
"We are working towards permanently protecting our lowest paid workers for the future. Staff affected will not only benefit from the extra money in their wages but also from additional benefits like increased pension provision.
"There is a compelling case to introduce a living wage because it brings dignity and pays families enough to enjoy a basic but acceptable standard of living. However it is important that we consider this very carefully in the context of ongoing Government budget cuts and our commitment to protecting vital services in South Tyneside."
The Council established the Independent Wage Commission in June last year to examine the benefits and challenges of adopting a living wage in South Tyneside. The Commission found that a living wage would make a positive contribution to reducing poverty and promoting well-being among low paid workers.
The Commission also identified that affordability would be a real challenge in the current economic climate, given that South Tyneside is one of the authorities to be hardest hit by Government funding reductions nationally.
The Council will therefore look to implement a phased introduction of the new hourly rate. From 1st April 2015 the lowest paid employees in the Council will receive £7.11 per hour. This represents an immediate increase up to a maximum of 67p per hour.
Cllr Ed Malcolm continued: "Of course we would have liked to implement the full living wage with immediate effect but given the unprecedented cuts imposed on the authority we have had to take a prudent approach.
"When we have further information on our future funding, we will sit down with our trade union colleagues to consider the affordability of implementing the full Living Wage from 2016 with a view to eliminating low pay across the Council's workforce."
Rachel Reeves MP, who is speaking at the event said: "It's brilliant that South Tyneside council is making this important commitment. It shows that even in tough times when there is less money around we can make choices that help build a fairer society.
"Everyone benefits from the Living Wage. Employees get a decent wage which gives the chance of a better standard of living for themselves and their families. Employers who pay a Living Wage find it can make business sense, generating savings through improved productivity, recruitment and retention. And the Living Wage also cuts costs for the Treasury with less being spent on in-work benefits."
Professor Keith Shaw of Northumbria University and chair of South Tyneside's Independent Living Wage Commission said: "South Tyneside Council's support for the Independent Commission's recommendation to introduce a Living Wage will make a real difference to the lives of people living and working in South Tyneside.
"In recommending its introduction, the Commission were convinced that increasing the income of the lowest paid employees would make an important contribution to reducing the scale of in-work poverty, have a positive impact on the life chances of families, young people and women and, by increasing local spending power, also boost the local economy in South Tyneside.
"The Council are to be commended for their support of such an important initiative."
Cllr Ed Malcolm added: "We would like to thank Professor Keith Shaw and his Commission members for their comprehensive report exploring what we can do as an employer to lift more people out of low pay and support local families. I am delighted to say that we have found a solution and pending Full Council approval will be able to start to take their recommendations forward."
Latest figures show that nearly a quarter of all South Tyneside workers (not just Council employees) are paid below the living wage.
The living wage is set independently, updated annually, and is calculated according to the basic cost of living in the UK.