Brent Council is to offer business rate discounts of up to £5,000 for businesses that pay their workforce the Living Wage.

The move makes Brent the first council in the UK to offer the reduced business rates. To qualify businesses must pay all of their workers the Living Wage of £9.15 per hour.

Reductions will be on a sliding scale dependant on the size of the business. Those with more than 500 employees could see their business rates fall by up to £5,000. The changes are due to come into effect in April of this year.

The Living Wage in London in arrived at by estimating the minimum wage workers can reasonably live on – based on factors including RPI and local rents. The Greater London Authority (GLA) calculates the figure and the wage itself is set by the Living Wage Foundation.

The move will partly be funded by the council itself. It will need to raise 30% of the cost – with the rest being bankrolled by central government (50%) and the GLA (20%).

>See also: Living Wage movement gathers momentum

Brent Council cabinet member for employment and skills Roxanne Mashari has previously said the council is “committed to championing the Living Wage and tackling the root causes of poverty in our borough”.

“We know that paying the living wage makes good business sense as it incentivises staff and helps to recruit and retain the best people, whilst reducing absenteeism,” she added. “This package of proposals announced today aims to create a further incentive for businesses in Brent to take the step towards paying their staff the living wage.

“Many hard-working people on low wages struggle to make ends meet and it is up to councils like ours to do everything we can to ensure that a fair day’s work leads to a fair day’s pay.”

Labour shadow work and pensions secretary Rachel Reeves welcomed the news and expressed her hope that more councils will follow suit.