Capita scraps promise to pay real living wage to staff

OUTSOURCING giant Capita faces a backlash from staff after dropping its promise to pay thousands of employees the real living wage.

The company, which collects the BBC TV licence fee and runs outsourced IT services for substantial parts of the NHS, said it had “reluctantly taken the difficult decision” to no longer pay the voluntary real living wage following its “second significant annual increase”.

The Living Wage Foundation, the charity that sets the rate based on how much it calculates people need to live on, has told companies to increase the amount they pay staff by £1.10 to £12 an hour this year, reflecting a surge in inflation-linked costs such as travel and bills. The 10pc uplift represents a significant increase in cost for companies with large workforces on lower wages.

Capita warned last month that it was already facing cost pressures after suffering a cyberattack last year.

The company’s 3,000 lowest-paid workers, who earn the real living wage of £10.90 an hour, will instead receive a 6pc pay rise to £11.56 in line with a statutory rise in April. A further 5,000 lower-paid staff members who earn slightly more than £10.90 an hour will also have their pay bumped up to £11.56. The decision not to offer these 8,000 employees the real living wage will save Capita about £3,520 every hour, according to The Telegraph’s calculations.

The Communication Workers Union, which represents Capita’s staff, called the decision “a disgrace” and said it “will be fighting this all the way”.

Capita joins Brewdog in dropping its promise to pay the real living wage. The Punk IPA brewer said last week its decision was “hard” but “necessary” in the face of continued losses. Capita warned last month that it had to slash costs after suffering a £25m hit from a Russian cyberattack. It was forced to cut axe 900 jobs late last year.

A spokesman said: “Colleagues currently on the real living wage will be paid more than the national living wage, and our lowest-paid employees will all receive an above-inflation pay rise.

“We remain committed to our people and will revisit this decision when appropriate, as part of our continuing review of our cost base.”