Employer's NI hike leaves council £1.5m worse off

Stoke-on-Trent City Council will be £1.5m worse off following an increase in the amount of National Insurance paid by employers, it has been revealed.

The upcoming rise in employers National Insurance (NI) contributions was announced by the chancellor Rachel Reeves in her autumn budget.

The local authority is set to pay an extra £4m in contributions in 2025-26 and, despite extra support from government, expects to still face a shortfall.

Members of the strategy and resources scrutiny committee were told that the council and other local authorities were making requests for further funding.

The request comes on top of an extra £16.8m it has already secured from central government to help towards a range of measures.

They include support for children's social care placements, to cover extra interest payments and improve services.

Nick Edmonds, from the council's strategy and resources scrutiny committee, said the additional funding for NI contributions was "a step in the right direction", but acknowledged "further pressures".

He said that the council had expected the increase to be fully funded, however the committee's officers explained that it had been taken from a "finite national pot", which would only cover about 70% of the increase.

Members of the committee were told that the council and other local authorities had requested further funding.

Councillor Dan Jellyman, leader of the opposition Conservative group and a committee member, asked if the shortfall was larger due to the recent decision to bring the Unitas housing repairs company back in-house.

Officers confirmed that this was the case, as it would increase the council's workforce and therefore its overall NI contributions.

However the Labour cabinet member for finance and resources, Alastair Watson, insisted the Unitas decision would not cost the council more overall.

He said the increased contribution would be "picked up by the housing revenue account" and would not add additional pressure to the council.

This news was gathered by the Local Democracy Reporting Service, which covers councils and other public service organisations.

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