Living Wage benefits employers too, research finds

A pay packet

Improved productivity and an enhanced company reputation have been highlighted as key benefits of organisations implementing the Living Wage according to an independent report.

The report – Wider Payment of the Living Wage in Scotland – highlights that increased productivity is also likely to outweigh the higher wage for many firms with increased pay creating a ‘feel good factor’ in the workplace.

Reduced absenteeism and reduced staff turnover have also been outlined as potential benefits by the report, which has been published ahead of tomorrow’s second meeting of the Fair Work Convention.

Cabinet Secretary for Fair Work, Skills and Training Roseanna Cunningham welcomed the report and said: “This is a fascinating report which, on the whole, offers a very positive outlook on the benefits of paying the Living Wage.

“As well as the more obvious benefits to individuals receiving higher pay, I hope the findings on improved rates of absenteeism and better productivity help convince employers, not already on board with the Living Wage, that it could be a very positive step for their business.

“A number of respondents also mentioned the reputational benefits of being a Living Wage employer, including reinforcing their positioning as ethical and socially responsible businesses.

“The Scottish Government is committed to fairness, supporting those on the lowest incomes, and we recognise the real difference the Living Wage can make to the people of Scotland. We have been working closely with the Poverty Alliance to encourage every employer to ensure all staff receive a fair level of pay. The Fair Work Convention, which meets for the second time tomorrow, is looking a number of ways to improved workplace relations and productivity, with fair pay seen as key to their work.

“Some of Scotland’s top employers already pay the Living Wage, with Aberdeenshire beer company Brewdog, fast-becoming one of our most recognisable brands becoming the 200th accredited organisation last week.

“A KPMG report from last month showed that Scotland is most Living Wage-aware region in UK with 9 out of 10 Scots having heard of the Living Wage and a higher proportion of employees paid the Living Wage than the UK as a whole.

“But employers paying the living wage is only half the story here. The tax and benefits system needs to work smarter to make sure that people on low incomes see a greater share of any increases in pay – and we will press the UK Government to make sure this happens.”

The report ‘Wider Payment of the Living Wage in Scotland’ was carried out by Ipsos MORI and Loughborough University and can be found at: http://www.gov.scot/Publications

Among the main points highlighted:

Existing research from other countries suggests that payment of the Living Wage can improve employee wellbeing, including higher satisfaction at the workplace. However, the effects on reducing poverty are less clear, as a large proportion of the employee’s pay increase is often lost in increased taxes and reduced means-tested benefits.

A considerable body of evidence shows no significant reduction in labour demand and employment levels due to increased wage floors.

Although increased productivity is likely to outweigh the higher wage cost for many firms, this does not mean that all firms will experience increased productivity, or that it will fully cover the cost for all those that do experience it. Some employers reduce labour costs in other ways (e.g. non-wage benefits), suffer reduced profits and/or pass the costs on to consumers in the form of higher prices.

To improve the implementation process, the Scottish Living Wage employers interviewed suggested employers should:

• conduct feasibility studies to identify and deal with potential risks

• communicate openly with staff about the rationale for adopting the Living Wage

• create a clear action plan for working with sub-contractors

The Scottish Living Wage employers interviewed suggested the Scottish Government could:

• provide advice and guidance on all aspects of the implementation phase

• encourage dialogue between Living Wage employers and those considering it

• raise awareness among recruitment agencies about the Living Wage

• provide more information and evidence on the benefits of the Living Wage

• provide financial incentives to help small businesses implement the Living Wage

• improve communications on, and engagement in, setting the level of the Living Wage

In the US, evidence on additional contracting costs due to enforcing a Living Wage among public contractors suggests at most very modest effects. In the UK – which, unlike the US, is unable to make payment of the living wage a mandatory requirement – a number of public bodies have nevertheless successfully included living wage considerations in procurement exercises. However, no satisfactory way of dealing with social care contracts has been found, due to very tight public budgets and a cost base dominated by low-paid labour.

Scottish Government contractors identified actions that could support the use of procurement to encourage implementation of the Living Wage, including:

• some form of subsidy to help offset increases in wage costs among contractors

• making use of local government and non-departmental government bodies to provide information and support

• workshops with contractors to provide information and advice on best practice

• providing robust evidence on the impacts, and advice on addressing barriers.

Food conference follow-up tomorrow

Taking the next steps forward to tackle food poverty

PCHP new logo (1)

Pilton Community Health Project recently produced a report on December’s ‘Good Food for All’ conference which focused on food poverty in North Edinburgh.

http://pchp.org.uk/sites/default/files/resource/files/Good%20food%20for%20all%20final%20report.pdf

The report identifies a number of issues that we, as people living and working in the community, cannot solve ourselves.  We need action on policy issues

Particularly:

–          Living wages

–          Job creation and security

–          Social security and the punitive sanctions regime

–          Better recognition of the contribution that this local community makes towards improving its own food culture and access to affordable, fresh, healthy food and further support for this

–          The role of business in the provision of food.

You are invited to a meeting on Tuesday 28 April from 10 – 12 at Pilton Community Health Project to discuss how we might go about having our voices heard on these issues.

Please let me know if you are able to attend.
Anita Aggarwal (Community Development Manager)

Pilton Community Health Project

73 Boswall Parkway, Edinburgh, EH5 2PW

Telephone 0131 551 1671

anitaaggarwal@pchp.org.uk

www.pchp.org.uk

Green MSPs call for wage rises to address food poverty

foodbank

Scottish Green MSPs are calling for wage rises to help address the problem of food poverty in Scotland, as new figures from the Trussell Trust show the use of food banks has risen by two-thirds over the last year.

The trust issued emergency supplies on 117,689 occasions in Scotland last year – including 18,000 times in Glasgow and 14,000 in Edinburgh.

Patrick Harvie, Scottish Green MSP for Glasgow, said: “These figures are sobering. It’s clear that the dismantling of the benefits system, the unfair sanctions regime and the low pay economy we now have are all playing a part. It’s simply unacceptable in a country with so much wealth and so much good food.

“An immediate step we could take is to stop subsidising employers who pay poverty wages. Let’s make the minimum wage a Living Wage right now.”

Alison Johnstone, Scottish Green MSP for Lothian, said: “Benefit sanctions, falling wages and an insecure jobs market are all having a big impact. Tackling in-work poverty is paramount.”

Cash to tackle inequalities in Edinburgh

Dunedin Canmore and Port of Leith Housing Associations among projects t0 receive People and Communities Fund awards

shutters

Projects which promote healthy eating, IT skills and household budgeting will receive more than £690,000 funding to tackle poverty and inequalities in Edinburgh, it was announced this morning.

Fourteen projects from across the city  have secured a share of the Scottish Government’s People and Communities Fund (PCF) to change disadvantaged communities by providing advice, training or voluntary opportunities.

These include Port of Leith Housing Association’s Canny Budgeting which will receive £35,000 to offer advice to residents on tackling fuel poverty, more than £10,000 for Dunedin Canmore Housing Ltd’s Digital Skills for All for IT workshops and £23,000 for Broomhouse Health Strategy’s healthy eating classes.

The 20 More project, will receive £37,000 through PCF to empower local people and help households save £20 a week, through training opportunities which will allow them to gain skills and qualifications in community development, and benefits and energy advice, at the project’s community shop.

Speaking on a visit to the 20 More Community Shop and Serenity Café which is also operated by Comas, Community Empowerment Minister Marco Biagi said: “Every community in Scotland has different challenges and aspirations and there is no one-size fits all approach to tackling poverty.

“That’s why our People and Communities Fund is giving communities in Edinburgh the power and confidence to shape their own futures.

“With household budgets under pressure, it’s great to see a project like 20 More looking for ways to save 600 of the area’s most vulnerable families at least £20 a week and helping to ease some of the stress of paying their bills.”

Ruth Campbell, Chief Executive of Comas said: “We are so pleased that the Scottish Government is focusing on empowering communities, as sustainable change must be community-led and start from the grassroots. This grant enables us to put local people in the driving seat and builds their capacity for community-led action.

“Training local people in benefits advice and energy saving will directly impact on wellbeing in this community. It will also help some residents gain employment in these growing sectors, so the grant will have a strong ripple effect.”

See below for the full list of projects to receive PCF awards: 

 http://www.gov.scot/Topics/Built-Environment/regeneration/community/pcf/awards

One Scot in eleven now living in poverty

Having a job is no guarantee of escape from poverty –  half of children living in extreme poverty were in households where at least one adult was in full time employment

homeless piper

More than half a million people in Scotland are living in severe or extreme poverty , according to the latest data published today. Scotland’s poorest people lived on less than half the average income in 2012/13, according to a new government report.

Around 510,000 people, including 100,000 children and 80,000 pensioners, are living in severe poverty – households with an income under £11,500. A further 230,000 were classed as living in extreme poverty, which means the household had an income of lower than £9200.

A household is defined as living in relative poverty with an income below 60 per cent of the UK median income. Severe poverty is defined as living with an income lower than £11,500, or 50 per cent of UK median income, while extreme poverty is defined as lower than £9,200, 40 per cent of UK median income.

The scale of the country’s poverty levels has been exposed in the Scottish Government’s Severe Poverty in Scotland report, which shows working age adults and children are more likely to live in severe poverty than pensioners, particularly after housing costs.

Commenting on Severe Poverty in Scotland, Social Justice Secretary Alex Neil said: “It’s a disgrace that so many people live in such severe or extreme poverty, but it’s an unfortunate and inevitable result of the UK Government’s failed austerity agenda and welfare cuts that are slashing incomes for some of our poorest households.

“With employment increasing and unemployment down, Scotland is outperforming the rest of the UK, yet the statistics show that a job is no longer any guarantee against severe or extreme poverty.

“That’s why we opposed cutting in-work tax credits and why the Scottish Government and its agencies are paying the living wage, encouraging other employers to follow suit.

“We have put tackling poverty and inequality at the heart of Government, through policies like the council tax freeze, free prescriptions, expanding childcare provision, while we are mitigating the worst of the welfare cuts, by replacing income lost through the bedroom tax or council tax benefits cuts.

“That action is making a real difference and we will continue to make the argument for a fairer welfare system.”

ChildPoverty

The statistics also make clear that being in a job is not a guarantee against poverty. Being in employment does significantly reduce the risk of poverty, but 44% of working age adults in extreme poverty lived in households where at least one adult was in employment, as did 60% of children – half of children living in extreme poverty were in households where at least one adult was in full time employment.

In 2012/13, around 10% of working age adults and 10% of children were living in severe poverty, as were 8% of pensioners.

After housing costs, 16% of working age adults, 15% of children and 6% of pensioners in Scotland are living in severe poverty.

Over the last decade, while the rate of relative poverty has fallen, a greater proportion of households in poverty were in severe or extreme low income in 2012/13.

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Parents and people with disabilities hardest hit by welfare reforms

‘This latest evidence shows that some of those most in need of support, namely parents and disabled people are being hardest hit. For us to be in this situation in 21st century Scotland is unacceptable.’ – Michael McMahon MSP 

ChildPoverty

Parents and people with disabilities are being hit hardest by the UK Government’s programme of welfare reform according to new research commissioned by the Scottish Parliament’s Welfare Reform Committee.

The report, published yesterday, represents the first time the impact of the UK Government’s welfare reform agenda on different household types in Scotland has been quantified.

The research for the Committee was conducted by Professors Christina Beatty and Steve Fothergill of the Centre for Regional Economic and Social Research at Sheffield Hallam University.

The new evidence shows that in Scotland, it is estimated that couples with dependent children will lose an average of more than £1,400 a year, and lone parents with dependent children stand to lose an average of around £1,800 a year from their income stream. 

In all, families with children will lose an estimated £960m a year – approaching two-thirds of the overall financial loss in Scotland.

Disabled claimants and those with health problems have also been shown to be disproportionately affected. Reductions in incapacity benefits are estimated to average £2,000 a year, and some of the same people also face big losses in Disability Living Allowance and reductions in other benefits.

Committee Convener Michael McMahon MSP said: “The Welfare Reform Committee has amassed a growing volume of evidence documenting the impact of the welfare reform agenda on Scotland’s communities. This latest evidence shows that some of those most in need of support, namely parents and disabled people are being hardest hit. For us to be in this situation in 21st century Scotland is unacceptable.”

The report also shows that almost half the reduction in benefits might be expected to fall on in-work households. 

Deputy Convener, Clare Adamson MSP said: “The Scottish Government is to be commended for introducing measures to alleviate some of the worst effects of the welfare reform agenda. New powers over a range of benefits are due to be given to Holyrood in the coming years and this research will help direct those new powers to help those most in need of support.”

Until now, there has been no way to assess the impact across the various benefits on different types of households. Because of the cumulative impact of people being affected by several different benefit streams, the overall impact of welfare reforms has been hidden.

The statistics are expected to become an essential tool for government and local authorities in shaping targeted responses and service delivery.

The research follows two previous reports which measured the financial impact of welfare reform on Scotland as a whole and by local authority area, and the impact down to ward level.

The Committee expects to hear oral evidence on this report at its meeting on 10 March. 

Professor Steve Fothergill, of the Centre for Regional Economic and Social Research at Sheffield Hallam University, said: “The figures demonstrate that the welfare reforms impact very unevenly.  The very big impact on families with children, in particular, has previously been under the radar because it is the cumulative result of several individual reforms. Coalition ministers have argued that “we’re all in it together”.  The impacts of welfare reform, documented in our report, show this is far from being the case.”

‘Shocking increase’ in food bank usage

New report shows growing demand for emergency food aid

Telford-Foodbank

More than 160 groups and organisations are now providing emergency food aid in Scotland. The figure is in a new report from the Poverty Alliance which states changes to the social security system and the introduction of sanctions, as well as low pay and insecure work are some of the main factors behind the growing need for emergency food.

The Cabinet Secretary for Social Justice Alex Neil launched the report at a food bank in his Airdrie constituency yesterday.

The Scottish Government has now provided the Poverty Alliance with £28,941 to carry out further work with emergency food providers. This will enable the Alliance to work with those providers to take forward research findings and to focus more strongly on the causes of food poverty and work towards ensuring people get the help needed to move them away from reliance on food aid provision.

Mr Neil said: “The Poverty Alliance report perfectly demonstrates the impact of UK welfare changes. It is unacceptable that so many have had to resort to foodbanks. Emergency food aid is not a sustainable response to the issue of food poverty and its underlying drivers and it cannot become an established feature of the welfare system in Scotland.”

“We have seen previously in figures from the The Trussell Trust, that there has been a shocking increase in food bank usage. This speaks volumes about the real poverty in our society when people can’t feed their families without help and support from food aid organisations.”

The Poverty Alliance report follows figures from The Trussell Trust which shows a rapid and dramatic rise in the number of people accessing emergency food aid in Scotland.

The Trussell Trust has reported a 12 fold increase in usage of emergency food aid in just three years – in 2011/12 5726 people in Scotland accessed food aid, while in 2013/14 that figure was 71,428.

The Poverty Alliance report concludes that more effort should be concentrated on how emergency food aid providers can better connect people with mainstream support services. Providers working in close partnership with other services have been shown to offer better support to those in need, connecting them to the advice and support required to address underlying issues which have led them to access emergency food aid in the first place.

Director of The Poverty Alliance Peter Kelly said: “We need to build on the good work that food aid providers are already doing. Volunteers are providing help to people experiencing real difficulties in often complex circumstances. There is a need to develop partnership working between emergency food aid providers to share ideas, experiences and good practice.

“In the longer term we need to ensure that we are developing policy solutions that address the root causes of food poverty. The support from the Scottish Government will help the Poverty Alliance ensure that those who are on the frontline tackling food poverty are able to contribute to finding these solutions.”

The Trussell Trust Scotland Network Manager Ewan Gurr added: “It has been a pleasure to work alongside and support the research carried out by our colleagues at the Poverty Alliance and we appreciate the consistency of the Scottish Government as they explore creative ways to tackle food poverty in Scotland.

“The voluntary sector, largely, has an openness to exploring fresh ways in which we can enhance the level of support people are offered. We welcome the report and believe it is important for us, as well as other food providers, to digest the findings. It has always been my ultimate desire that our foodbanks are places where dignity is restored, hope is revived and the support is comprehensive and robust.”

To help food aid providers develop a better understanding of the range of support available for users of emergency food aid and identify additional support, the Poverty Alliance has developed a web based resource to assist those delivering emergency food aid better link with mainstream services such as Citizen’s Advice Scotland as well as with other information and links to key support services at www.foodaidscotland.org

More Power to the People!

Another £5.6 million for People and Communities Fund

broomhouse 1

A fund which gives community groups the power to tackle poverty and inequalities in their areas has been given a £5.6 million funding boost.

Social Justice Secretary Alex Neil confirmed community-led regeneration will be given extra support through the People and Communities Fund (PCF), on a visit to the Broomhouse Health Strategy Group this morning.

The People and Communities Fund will be increased from £9.4 million to £15 million as it benefits from support through the dedicated £10 million funding for Empowering Communities announced by the First Minister last November.

This investment builds on the Government’s commitment to giving people the power to take charge and make changes in their own communities.

The additional funding will be allocated to a variety of projects, including community groups who are promoting change in disadvantaged communities through training, employment, healthy eating and volunteering opportunities.

Mr Neil made the announcement ahead of this afternoon’s Stage 1 Debate for the Community Empowerment (Scotland) Bill. He said:

“We know every community in Scotland has different needs, and that we all have our own ideas about how we can make our areas better.

“This Government recognises that by giving communities the power and confidence to shape their own futures, we can tackle poverty and address inequalities more effectively. 

“Through the People and Communities Fund we will provide money direct to community groups to help them tackle local issues on their own terms.

“This new money will support the aims of the Community Empowerment (Scotland) Bill, which will give people a stronger voice in the decisions that matter to them and will help communities who wish to take over public land and buildings.”

Since PCF launched in 2012, 156 projects have received funding worth £18.3 million those projects include the Broomhouse Health Strategy Group which was awarded almost £30,000 to run cookery and exercise sessions which encourage local people to make healthy lifestyle choices.

The sessions have helped increase self-esteem and confidence among local people, many of whom had never cooked a meal from scratch before, and it has supported their skills development with some developing the confidence to move into local volunteering roles.

Lucy Aitchison, from the Broomhouse Health Strategy Group said: “It’s been great to develop our health and wellbeing services, and you can see them making a real difference to people’s lives.

“To give people the skills to be able to look after themselves and their family more healthily is really significant. We’re so pleased to have the support to be able to address these local needs.”

For more information about the Community Empowerment (Scotland) Bill visit:

http://www.scotland.gov.uk/Topics/People/engage

Details on The People and Communities Fund can be viewed at:

http://www.scotland.gov.uk/Topics/Built-Environment/regeneration/community/pcf

Recovery? What recovery?

Latest statistics show sharp rise in number of hard-pressed households receiving help

poverty

The experts tell us the recovery’s underway, but many ordinary Scots families are still feeling the economic pain – the number of households applying for welfare assistance has risen by a third in the last year, according to the latest statistics. 

Scottish Welfare Fund Statistics to 30 September 2014 show that during the most recent quarter (July to September 2014):

  • 52,400 applications were made to the Scottish Welfare Fund, an increase of 33 per cent on the same quarter last year;
  • 25,800 Crisis Grants were awarded, 32 per cent more than the same quarter last year. These were predominantly for food, heating costs and other living expenses, with an average award value of just over £70;
  • 11,200 Community Care Grants were awarded, 51 per cent more than the same quarter last year. These were predominantly for home furnishings and white goods, with an average value of just under £600.

Cabinet Secretary for Social Justice Alex Neil said: “That anyone should be live in poverty in a wealthy country is completely unacceptable and we’ll continue to tackle poverty and inequality to create a more prosperous and fairer society.

“Scottish Welfare Fund grants are a lifeline for people in crisis to buy the everyday items, or cover basic living costs that so many of us take for granted. This is why we are taking steps to establish the Fund in law through the Welfare Funds (Scotland) Bill.

“120,000 households in Scotland, one in twenty, have now been helped by the Scottish Welfare Fund in its first 18 months of operation. The increase in applications over the last year is due, in part, to work done by local authorities and advice services to raise awareness of the Fund.

“We have allocated £33 million a year to the Scottish Welfare Fund to make sure that we continue to reach out to households in the most deprived areas – around half of awards are made to applicants in the 20 per cent most deprived areas of Scotland. Many families are paying a heavy price for the UK Government’s welfare reforms and this investment will help to mitigate the effects of these cuts on some of our most vulnerable households.”

In work and in poverty

Majority of children in poverty live in working households

poor kids

More than half of children living in poverty in Scotland are growing up in households where at least one person is in employment – and that number is rising, according to new research published today.

Speaking in a debate in the Scottish Parliament later today, Cabinet Secretary for Fair Work, Skills and Training Roseanna Cunningham will argue that it is unacceptable that work is no longer the straight forward route out of poverty and will reiterate the Scottish Government’s pledge to tackle inequality and build a fairer Scotland.

The Cabinet Secretary is speaking as research published today shows that the proportion of those in in-work poverty is gradually increasing and that for many, moving into work doesn’t necessarily mean moving out of poverty.

Ms Cunningham said: “It cannot be right that the majority of working age adults in poverty in Scotland are in ‘in-work’ poverty. Well-rewarded and sustained employment is the best route out of poverty, for those who are able to work, and one of the best ways to tackle inequality.

“This is why we are prioritising the promotion of the living wage and working closely with the Poverty Alliance to encourage more employers to sign up to the Living Wage accreditation scheme. Business productivity goes hand in hand with fair and equal pay. We must all be fully committed to fair work.”

The Scottish Government is developing a Scottish Business pledge to invite companies to commit to extending the living wage, involve their local communities and invest in youth training and employment. In return businesses will be offered a package of tailored support on skills, innovation and exports to help them grow and prosper.

New research looking at in-work poverty summaries the evidence about the extent and impact of in-work poverty in Scotland. It identifies three key factors that influence in-work poverty – hourly rate of play; number of hours worked by members of the household; income gained and lost through the welfare and tax systems.

The main findings of the research include:

• The majority of working age adults in poverty, 52 per cent, are in in-work poverty and that number is increasing

• For children in poverty, 59 per cent are living in households with someone in employment which can have a profound and lasting impact on children’s outcomes

• In work poverty is costly to society via payment of tax credits and other in work benefits which top up low income

• Having one earner in the household means families may be more at risk of poverty at a time when the average living standard, and hence the relative poverty threshold, is increasingly determined by the living standard of double-earner households

• Low-wage work is a ‘dead end’ for many. Workers who are low paid at any one time are more likely to remain in low pay later in life.

You can view the Summary of Evidence Report at :http://www.scotland.gov.uk/Publications/2015/01/3233