Working tax credits and the local government workforce
Working tax credit (WTC) is a benefit paid to workers with a low family income. This report calculates how much WTC can be attributed to the local government workforce, and how this compares with other parts of the public sector and the private sector.
Receipt of WTC is important as it shows the extent to which workers employed by government are reliant on financial support from the same government – raising issues of pay and hours. The local government sector in some ways resembles some of the lowest paying and most insecure parts of the private sector, namely retail and hospitality. This paper explores some of the similarities.
The definition of the local government workforce aims to get as close as possible to the National Joint Council for Local Government Services workforce as possible. This research is based on official survey data for 2011-12 and 2012-13. It follows on from NPI’s first attempt to quantify working tax credit expenditure by industrial sector. The main findings of this report are that:
- The proportion of local government workers receiving WTC at 11.2% is around two and a half times higher than the rest of the public sector. This suggests that some of the cost of low pay in local government is merely being displaced to WTC expenditure.
- In the public sector, the local government workforce accounts for 25% of workers but 50% of WTC expenditure. This highlights how poorly paid the local government workforce is compared to the rest of the public sector.
- Comparing the local government workforce to individual industrial sectors suggests that the proportion of workers receiving WTC is equivalent to retail and administrative and support activities.
- The local government workforce receives £380m a year in WTC. This is around the same as received by the manufacturing sector, and only slightly less than is received by administrative and support activities overall.
About this report
This report was funded by UNISON and written by Adam Tinson. The facts presented and views expressed in this report are those of the authors and not necessarily those of UNISON.