As the Greater Manchester mayoral election approaches, a key issue on the candidates’ agendas is raising employment standards across the city. Here, Ceri Hughes from the Inclusive Growth Analysis Unit and Emily Ball from Oxfam GB discuss the policy implications of rolling out a local employment charter in Manchester, highlighting what this would mean for both employers and employees in the city.

• More than half of the people in poverty in the UK are in working families
• Local employment charters can play an important role in addressing some of the labour market issues affecting those in low-paid, insecure employment
• Devolution and the election of a new metro mayor creates an opportunity for strong local leadership on the issue
• Local employment charters can encourage and support employers to change their practices and drive up standards however there are still limits to what they can achieve

More than half (7.4 million) of the people in poverty in the UK are in working families. Concerted action is required if we are to take on this long-term trend but one way to begin is by working with employers to raise employment standards and expectations around what constitutes decent work.

Ahead of the Greater Manchester mayoral elections on 4 May,  the Inclusive Growth Analysis Unit at The University of Manchester has been working with Oxfam GB and Greater Manchester Poverty Action to examine the role that local employment charters can play in addressing some of the labour market issues affecting those in low-paid, insecure employment. The paper is available here.

The devolution of formal and soft powers at city region level creates an opportunity for strong local leadership on this issue and at least two of the mayoral candidates are already committed to exploring the idea of a local charter.

What is a local charter?

Local employment charters are voluntary initiatives that set out to describe good employment practices and recognise those employers that adopt them. Our work examines existing charters adopted by local councils, Local Enterprise Partnerships and campaigning groups. A number of local authorities have developed their own employment charters, including areas across Greater Manchester like the Salford City Mayor’s Charter for Employment Standards, established in 2013, and the Oldham Fair Employment Charter.

There are some clear reasons for focussing on employment standards in the city region. For one thing, 23% of the jobs done by the residents of Greater Manchester are paid less than the Living Wage and by 2020 the Resolution Foundation estimates that 1 in 6 workers in Greater Manchester will be on the minimum wage. Meanwhile, 180,000 working-age people have no qualifications which can make it difficult for them to enter and progress in work.

Employment charters may help us to achieve a more inclusive labour market that offers more people the opportunity to take part in rewarding, well-paid work, bringing both economic and social benefits. This idea underpins the current interest in ‘inclusive growth’, a form of economic growth that, as defined by the OECD, creates opportunities for all segments of the population and distributes the dividends of increased prosperity.

The impact of voluntary local action on employment standards

Local employment charters can encourage and support employers to change their practices and drive up standards, and, therefore, inclusion. We have found that local employment charters can provide direction, tools and resources for employers interested in offering good employment as well as helping to establish a standard. This can make some headway in outlining fair and decent pay and employment conditions, recruitment practices, employee engagement and investment in training and development.

However, there are limits to what they can achieve. They are usually voluntary initiatives and tend to engage directly only with a small number of employers. The commitments also usually only address the issues affecting current and potential employees, leaving out those people working within a company’s supply chain. (Though the Living Wage accreditation scheme is a notable exception and has been promoted through some employment charters).

Maintaining momentum and pushing for organisational change is challenging, particularly where there is limited resource to support business engagement. Many charters offer ‘incentives’ and an accreditation process to encourage engagement. Some require businesses to sign up to the charter to access council contracts or, in one example, to access a business rate discount for small employers. But if poorly resourced and not regularly promoted and monitored, the credibility of employment charters soon diminishes.

An employment charter for Greater Manchester

We argue that for an employment charter for Greater Manchester to be successful, due care and consideration needs to be taken when making choices about its design, implementation and reviewing process. Recommendations include:

• Establishing a dedicated independent working group of representatives from the ten local authorities, the Greater Manchester Social Value Network, business and trade union representatives, campaigners, and others with experience of designing and implementing employment charters;
• Being clear on the expected impact; setting out deliverable and measurable commitments and showing how the charter fits within a wider agenda for inclusive growth;
• Balancing flexibility, rigour, and incentives for businesses across different sectors to increase engagement;
• Ensuring robust monitoring is built in along with the resource that is required to support business engagement and accountability.

By learning from the strengths and understanding the limitations of existing charters, Greater Manchester could really test the potential of voluntary employment charters.