In this section:

Compensation for increase in Employers’ National Insurance contributions 24/01/2025

MHCLG has written to say that in the Local Government Finance Settlement before Christmas, the Government announced an additional £515 million specifically to soften the impact of the increases in employer National Insurance Contributions (NIC) announced at the Autumn Budget. This funding is not ringfenced and can be credited to Housing Revenue Account (HRAs) under an Item 4 Credit: contributions towards expenditure as provided under Part II, Schedule 4 of the Local Government and Housing Act 1989. 

 

The £515 million will be allocated between local authorities in England based on their shares of total relevant net current expenditure. Local Government Finance (LGF) colleagues have published a methodology note to assist councils with their financial planning. Final allocations will be provided to individual local authorities by the final Local Government Finance Settlement in early 2025.

 

Early feedback from authorities suggests that this sum falls far short of the full cost of the increase in NICs payable by councils in respect of directly employed staff, and of course takes no account of increases in contract costs where contract terms allow such increased NIC costs to be passed on.  ARCH is eager to gather evidence from member authorities on how the NIC increases affect them compared to their expected share of the £515 million funding.

 

Please send to ARCH Policy Adviser - matthew.warburton@arch-housing.org.uk.

 

Like emailLink
ARCH Member Comments 0 people like this

Housemark