The Labour opposition has urged Westminster Council to ensure it pays the London Living Wage to all contract staff as well as permanent employees.

But Councillor Melvyn Caplan, cabinet member for finance, said it would be difficult to find the money to increase wages for out-sourced contractors while the council is wrestling with government austerity cuts.

Mayor of London Boris Johnson announced on Monday (Nov 4) during Living Wage Week that the London rate would increase by 25p to £8.80 per hour. This is £2.49 above the current national minimum wage.

Mr Johnson encouraged businesses to adopt the non-compulsory rate, saying it was ‘not only morally right, but makes good business sense too’.

However, Westminster Council was unable to fully support the campaign.

Mr Caplan said: “All council employees at Westminster are already paid on or above the London Living Wage.

“Calling for our contractors to introduce the London Living Wage is a laudable objective, but we have to consider what the cost would be at a time when this council is faced with making hundreds of millions of pounds worth of savings.

“We have to ask where will the money to fund increased wages come from.”

Leader of the Labour opposition, Councillor Paul Dimoldenberg will urge the Tory cabinet to raise wages at next week’s full council meeting. He said the cost of living continues to rise while incomes stagnates putting enormous strain on hard-up families across the borough.

He said: “Adopting the London Living Wage for all the council’s workers, whether they are directly or indirectly employed, is the practical and common sense thing to do. This should not be a party political matter and we call on Westminster Conservatives to vote for this cross party initiative next week.”

Mr Caplan said that the Westminster City Save discount card and the council’s energy switching scheme were some of the initiatives helping staff and residents to cope with increased living costs.

The Diocese of Westminster and trade union Unison are also working together to support Catholic schools implementing the London Living Wage.

Kate Griffin, interim director of education at the Diocese, said: “Social justice is an important part of Catholic teaching and our schools work extremely effectively to promote this aspect of our faith. It is good to see our words follow through into action in this way.”