CNJ COMMENT - New council’s work cut out in pay balancing act

Published: 3 June, 2010

THE new Labour Council’s move to increase the wages of its lowest-paid workers should be applauded.

Companies employed to carry out services for the council will only win the contracts if they pay the London Living Wage (see page 2) – the same base figure awarded by Boris Johnson to all Greater London Authority staff. 

But will University College London, for example, follow suit when it opens its academy school in Swiss Cottage next year? 

Six universities in London now back the £7.60 per hour rate, but UCL says it has “no plans” to adopt the living wage, though its president Malcolm Grant is paid about £350,000 a year. 

Meanwhile, feelings and opinions are shaping up for a clash at the Town Hall. 

Some of the senior civil servants, apparently, are unhappy about a London Living Wage policy, afraid that in these straitened times it will knock budgets off course. 

But the move has been described as of such “moral importance” by some Labour councillors that they regard it as an untouchable touchstone. But when funds from Whitehall – once flowing fairly steadily from Gordon Brown – begin to dry up under the scalpel of George Osborne, will the political and economic scene   look different? 

There is little doubt a hazardous future faces the council which all councillors – but Labour in particular – must dread.

When, not if, the council is handed much less cash, how will the Labour majority react? 

The government has already made it clear it will not allow municipal authorities to make up the shortfall with a higher council tax.

Times have changed since the 1980s when the council – along with other authorities – buckled eventually from the pressure of the law and Mrs Thatcher.

More likely, Labour will seek to balance the books by streamlining departments and making efficiencies. 

But this could lead to staffing cuts many Labour councillors would find distasteful, if not electorally risky.

But how else can the millions be saved? And under Whitehall constraints there will be millions less to spend than in the good years. 

If Labour councillors bend their minds, there is little doubt they can probably save millions by employing fewer consultants.

But this requires such an intense analysis of how their departments work that, as in the past, it may prove beyond their grasp.

The ball is in Labour’s court.

Rebellion may be seen as a non-starter.

But otherwise, can enough fat be cut from the budget without hurtful cuts in social services, and the loss of jobs?