I have been a councillor since 2002 and this has been one of the most challenging budget processes I have been through. Why, one might ask?
Of course, pressures in social services have exacerbated our budgets over recent years, but this year we’ve also had to contend with Labour’s unexpected rise in employer National Insurance contributions (NICs) – unexpected in that Prime Minister Sir Keir Starmer made it clear that taxation, including National Insurance, wouldn’t increase under Labour.
As Cllr Tim Oliver OBE, Chairman of the County Councils Network, has pointed out, from the perspective of non-metropolitan local authorities “this was the worst settlement in years”.
We all know the specific spend pressure the increase in NICs has placed on our respective councils’ finances. Frankly, it is money I’d rather our councils be putting into road resurfacing, more fly-tipping enforcement, or flooding alleviation.
“We’ve had to contend with Labour’s unexpected rise in employer NICs”
We got a mere compensation grant from the Treasury to cover some of these new costs, but it didn’t touch the surface.
In response to a recent Written Question in the House of Lords, the Government wouldn’t confirm that the grant would be renewed next year, only that it would be a matter for the upcoming Spending Review.
The real hit on councils will come in 2026/27 without this grant, and the hit will be seismic, mark my words!