Government and charities must work together to tackle endemic low pay in the charity sector, according to a new action plan from the Living Wage Foundation.

The action plan, Tackling Low Pay in the Charity Sector: An Action Plan, cited Government cuts to charity funding, and a lack of awareness of the real Living Wage, as leading to intense competition for funding and a ‘race to the bottom’ environment on pay in the sector.

The action plan makes two key recommendations to tackle low pay within charities:

  • Government commissioning bodies should procure services based on the Living Wage as a minimum for delivery staff, by giving favourable ‘weighting’ to Living Wage bids as part of the procurement process.
  • Grant-makers should become ‘Living Wage Friendly Funders’, championing fair pay and ensuring that charities are able to pay the real Living Wage on funded projects.

In November 2017 the Living Wage Foundation – in partnership with a group of twelve major funders, NCVO and Cardiff Business School - published the Low Pay in the Charity Sector report. The report found that over a quarter (26%) of charity workers are paid below the real Living Wage - a higher percentage than the average across all sectors in the UK workforce (22%).

Tackling Low Pay in the Charity Sector: An Action Plan is a response to this report. It involved conversations with charities, umbrella bodies, trade unions, funders and workers, to identify the barriers to tackling low pay in the charity sector and the solutions to ensure charity workers earn a wage they can live on.

Tess Lanning, Director of the Living Wage Foundation, said:

“The huge scale of low pay in the sector reflects the fact that charity work is often unappreciated. But charity workers deliver childcare, social care, women’s refuges and other vital services to some of the most vulnerable people in our society. They deserve a real Living Wage that covers the cost of living.”

“We now need to see government and the sector work together to deliver real change, and commit more charities to go beyond the Government minimum and pay a real Living Wage.”

John Hume, Chief Executive of People’s Health Trust, said:

"It's clear the charity sector has a huge problem with low pay. There are thousands of charities doing great, important work, but too often they are struggling to provide decent pay, with Black and Ethnic Minority, part-time and young workers hit the hardest.

"Charities have had to deal with deep cuts in funding which in turn has meant passing on this financial squeeze to already struggling workers.

“If we are to address this issue then we need to go to the root cause. The action plan calls on commissioners and funders to recognise the intrinsic value of paying the real Living Wage and to begin to see a concerted effort from all parties to drive this change through the sector. We need to see more funders and commissioners provide a real Living wage that covers the cost of living, and more charity workers receiving a fair day's pay for a hard day's work."