My preliminary discussions with council leaders over recent weeks, ahead of February budget setting, continually brings to bear the reality of the Labour Government’s seismic increase to employer National Insurance contributions.
Even a few months ago, local government hadn’t considered the prospect of an increase in National Insurance contributions; why would we?
The Prime Minister and Chancellor repeatedly said during the general election that taxation would not go up under a Labour Government.
Analysis by the LGA confirms that the direct cost of Labour’s job tax on directly employed staff for the 2025/26 financial year will be in the region of £637 million.
“Some of these burdens may be refunded, but for how long?”
We know that some of these burdens may be refunded by the Treasury; however, for how long will councils be covered and what about the costs on our external providers?
Again, LGA analysis confirms that the indirect costs, including for commissioned adult social care services, could be around £1,128 million.
I am also concerned that the refund for the public sector from the Treasury will not include our colleagues in town and parish councils.
Our friends in town and parish councils do an enormous amount to reduce the pressures faced by upper-tier authorities. They are the cornerstone of our local communities and do so much to ensure the priorities of their residents are delivered.