Rising cost to council of boosting salaries to match market rate

East Devon District Council's HQ, Blackdown House in Honiton

East Devon District Council's HQ, Blackdown House in Honiton - Credit: LDRS

The amount spent on boosting staff wages at East Devon District Council (EDDC) to compete with the private sector has more than doubled in the past year. 

The salary incentives, known in the council as ‘market supplements’, have already cost East Devon £137,000 this financial year compared to £67,000 for the whole of the previous 12 months ending April 2021. 

A market supplement is a temporary fixed-term addition to employees’ basic salary to bring their total pay for the role up to the going market rate. The council, which employs approximately 500 permanent and fixed-term employees, is currently paying 41 such market supplements per month, and has paid more than £3,300 on average since April to each staff member on the scheme. 

A council spokesperson said: “Market supplements reflect trends in the marketplace and the difficulty in recruiting suitably qualified staff to the council. They are reviewed annually and are a useful tool in filling vacancies where the data shows that the pay we are offering is not comparable and has fallen behind. 

“We have seen in the wider economy the difficulties that many in the public sector and private sector businesses have had in recruiting staff and the council is suffering from the same issues.” 

Office for National Statistics figures for October 2021 show that labour supply is not keeping up with demand. Across the country, vacancies reached a peak of 1.1 million, with 1.45 unemployed people per vacancy, thought to be the lowest figure in at least half a century. 

The council’s wage bill will rise again in April when National Insurance contributions for employers and staff rises by 1.25 per cent, costing East Devon a further £119,000 per year. 

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The lowest salary paid by the council is £9.25 per hour, less than the ‘real living wage’ rate of £9.90. The council says relatively few people are on this wage and it is likely to change as part of a ‘reward review,’ to be completed in January. 

The review will explore actions to fix recruitment and retention issues. 

EDDC is also carrying out a ‘recruitment strategy review’ to see if it can improve its ’employer brand’ and recruit from a more diverse pool of employees in future.