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.