Agenda item

Councillor Calum Watt, Chair of the Community Leadership Scrutiny Committee, opened the meeting with a brief introduction to guest speakers and the topics of discussion which were Low Wages in the City of Lincoln and an update on the Cultural Consortium.

The Committee received a presentation from Simon Beardsley, (CEO, Lincolnshire Chamber of Commerce and Managing Director, Lincoln BIG) and Rob Johnston, (Policy and Campaigns Officer, Trades Union Congress Midlands). During consideration of the presentation, the following points were noted: -

• The Lincolnshire Chamber of Commerce Quarterly Economic Survey, Quarter 2 2023 showed domestic sale had improved however 30% had reported a worse level
• Overseas sales were in the worst state in fifteen years
• Half of employers had tried to increase their employee numbers with 25% being successful. 86% however had experienced difficulty
• 30% of businesses had increased investment in training
• The total number of advertisements for job roles were at peak levels and further to concerns of rising inflation, businesses indicated 43% worsened cash flow
• Confidence has risen slightly and there were positive indicators that inflation would begin to come down
• Inflation, utility bills and labour costs remained the primary concern for respondents of the survey
• Median rates of pay in Lincoln were 10% lower than the UK average with 1 in 4 individuals within the City paid below the National Living Wage
• The median annual wage increased by 8.1% in Greater Lincolnshire between 2021 and 2022, compared to 6.8% nationally.
• There had been a number of high profile cases within the media that exposed organisations such as Argos, M&S and WH Smith, that paid a low wage
• Inflation as of May 2023 was 8.7% and the year on year increased in fuel and electricity was 88.5%
• The rate of pay had increased but the rise in inflation resulted in the pay gap widening
• Predictions showed a decrease in the rate of inflation approximately 2% over the coming year
• Vulnerability figures showed that 16.8% of people in Lincoln were in fuel poverty, 8.8% lived with food insecurity and 16.8% received low pay
• The economy was challenging, and cost pressures were likely to continue with businesses likely to remain uncertain of growth prospects
• Automation had become more prevalent and recruitment difficulties had resulted in business’ that had changed to secure retention of staff.

The Chair thanked Simon Beardsley for the informative presentation.

The Committee received a presentation from Rob Johnston, (Policy and Campaigns Officer, Trades Union Congress Midlands). During consideration of the presentation, the following points were noted: -

• There was an ongoing historical crisis in rates of pay and the average weekly wage was £497.00, the same as in November 2005
• East Midlands was a low pay region with a low wage trap that needed to be broken
• Lincoln was notoriously difficult to access with limited public transport and an absence of a motorway
• Lincolnshire suffered with hidden rural poverty with 1 in 4 paid below the National Living Wage
• The jobs that were available within Lincoln were difficult for young people to access which resulted in blockages to economic growth
• Social Care was a vital public service however had historically been a low paid position. There was on ongoing campaign to raise social care wages to a minimum of £15.00 per hour.
• If successful, the £15.00 per hour wage for social care staff in Lincolnshire would result in a £136M uplift in the local economy.
• Instead of an increase in pay and opportunities, there appeared to be a decrease in workers terms and conditions and a rise in insecurity
• There was a generational divide between renting and homeowners
• The Advisory, Conciliation and Arbitration Services (ACAS) had led on a Good Work Charter and there had been a Fair Work Commission in Scotland.
• A Midlands Charter had been put into place to support fair contracts
• The Devolution agenda raised concerns for areas outside of combined authorities
• Procurement was vastly underused with not enough focus placed on the potential of ‘social value’ within public sector procurement
• If the procurement of the public sector across Lincolnshire were to be coordinated, the result would be significant resource behind a shared agenda to ‘move the dial’ on social deprivation and life chances
• The Agricultural Wages Board was dispersed in 2014 which removed the floor for fair wages for farmers
• It was important to recognise the historical challenges and devise a strategic plan in order to see a rise in living standards and better opportunities within the next eighteen years.

The Chair thanked Rob Johnston for the informative presentation. Further to both presentations, the Chair welcomed comments and questions from Members of the Committee. As a result of discussions between Members and speakers, the following points were made: -

Question: What was the total number of businesses in Lincoln that were empty and what was the reason for closure?

Response: Businesses closed for a variety of reasons which included the end of a family business or a national chain that closed locally due to decisions made at senior level. It may be that a business was in the wrong place with the wrong product. Lincoln had done well with start-up businesses and were ahead of the national curve. The challenge was the retention of businesses within the City centre to ensure a vibrant City centre that people wanted to visit. Figures on the number of business closures would be circulated further to the meeting.

Question: How many people in Lincoln worked under a zero hour contract and thus, not in receipt of a regular wage?

Response: There was no known metric for the calculation of individuals who worked under a zero hour contract.

Question: What was the average median wage for a worker in Lincoln?

Response: The median annual earnings for full-time employment in Lincoln in 2022 was£31,011. Gross weekly pay was £618. The gross weekly pay for part time employees in 2022 was £230 weekly. All figures had seen an increase on the previous year and some industries had paid more.

Question: Retention of staff was important. There was a cost benefit in the retention of experienced staff. There had been increased competition between firms in an attempt to offer attractive packages to incentivise staff. The cost and the time to train someone new was significant. How had businesses adapted to those challenges?

Response: It depended on which sector and where in the county it was. There was a point that businesses had provided all the benefits and an increased wage but the staff member had made their mind up and wanted to leave. Many companies had looked at benefits packages. A business might not be in a position to afford an 8% pay rise but some had offered incentives such as loyalty bonuses, healthcare etc or an increase of year bonuses. Businesses had found it difficult to retain staff and had to use a number of methods to increase salary. Some had been innovative in terms of other packages e.g. training. Recruitment was a large expense.

Comment: It was not always the case that pay was the main incentive for employees. Incentives included continued professional development, progression, and work culture. It was important to consider the wider non-monetary benefits.

Response: The Midlands Good Work Charter explored the principles of good work which included genuine flexibility, employee voice, ownership, and the ability to shape workloads. Businesses that adopted the approach experienced lower levels of sickness absence and higher productivity. The University of Lincoln was vital in the retention of local talent. Adequately funded public services were important for growth.

Comment: A survey entitled ‘Low Pay Britain 2023 – Improving Low paid-work through Higher Minimum Standards’ suggested that as many as 10% of employees would turn down a rise in pay for improved conditions and dignity.

Comment: Management was very important. The culture of management had changed, and it was important for employees to be enabled to carry out their job roles and not simply instructed.

Question: The Lincoln City Profile for the City of Lincoln Council (CoLC) stated in 2021, Lincoln’s median earnings were more than those from the East Midlands. Was the average wage in Lincoln higher than the East Midlands?

Response: The National average was £33,000. The Greater Lincoln average previously had been £29,442 but most recently was £31,111.

Response: Work was underway to refresh the Lincoln City Profile. Extracted from the Nomis 2023 database, Lincoln median wage was £31,011. The East Midlands average for 2022 was £30,900 and therefore we were approximately £100 above East Midlands. Nationally, the average wage was £33,208.

Question: Which sectors had experienced difficulty in staff recruitment?

Response: Staff recruitment was problematic within the hospitality sector, retail, higher skilled engineering and general administration. Lincoln BIG had attempted to recruit three town centre wardens of which had been unsuccessful.

Comment: Healthy life expectancies varied between areas. It was useful to plot how things had changed. Some issues were entrenched over a very long time e.g transport to attend work.

Question: There were a number of issues with energy, inflation and labour costs, at the same time. The East Midlands Development Agency benefitted Lincoln tremendously. The Preston Model was a modern model for authorities to come together with Unions. Social deprivation was akin to industrial revolution scales. What would be a good model for adoption in the future?

Response: It was important to identify the position you wanted to reach and to be honest about identified challenges and strengths. Consideration should be given to issues that leaders had autonomy and power over. Civic leadership was an important role. Organising campaigns made a positive difference. There was a strong network within Lincoln to create great partnerships with the inclusion of all relevant stakeholders to form a coalition.

Response: The country was living through a period of change. To aspire to be a forward looking City within the UK, it was important to act, react, and plan quickly. It would be useful to consider if Lincoln wanted to be a top ten City. The CoLC had a real role to play, to be the conveners and the platform to enable people to invest in their ideas of what Lincoln could be. The coming together of partners and collaborative work was essential.

Response: The CoLC strategic plan, Vision 2025, detailed economic development and regeneration. Partners would be involved in the creation of Vision 2030 and there was already a good understanding of the key industries within the City. Vitality of the area depended on the vitality of the City Centre. Consideration needed to be given to whether individuals could afford to live in the City and was there available housing within the City to rent? Securing a rental property within the City was very hard. The Council had a corporate vision in place and would work to develop Vision 2030 to grow the local economy for everyone.

Comment: Small businesses had found the current economy difficult. Wages within the City were slightly lower however most workers did not live in Lincoln. Transport offerings were inadequate, often late and very expensive. East Midlands appeared to be formed of Derby, Leicester and Nottingham. Lincoln needed to consider if it wanted to be a part of that or if Lincoln wanted to stand on its own. It would be positive for Lincoln to have its own unique selling point. The City was surrounded by agriculture and the economy was very mixed with the issue of connectivity. It was the most difficult climate for the public sector for a number of years.

Question: How could the dynamics of automation factor into low wages in Lincoln and the wider East Midlands?

Response: Automation would not be the initial solution as there was a time lag. There was an increase in automation which would remove some lower level jobs. Consideration needed to be given to the oversite of automation and the equipment. There was the potential for a shift in the labour market.

Response: There had been a technological revolution over the last twenty years and there had been a large impact on blue collar work. Automation was beginning to challenge middle skilled jobs such as conveyancing. It was important to shape the technology to enable empowerment.

Members expressed their gratitude to guest speakers for the information provided within discussions and for their work.

The Chair echoed comments from Members and thanked guest speakers for their attendance and contributions to discussions.

RESOLVED that: -

1)    The Democratic Services Officer be tasked with circulating the following to Members, further to the meeting:

a.    The Midlands Good Work Charter

b.    Statistics from guest speaker, Simon Beardsley

c.     Statistics regarding the rate of pay growth within Lincolnshire

The content of the presentations be noted with thanks.