Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 22
22
Deferred
Increased employer National Insurance Contributions represent an unfunded mandate for local authorities
Conclusion
The increase in the rate of employer National Insurance Contributions has placed a significant financial burden on local authorities that has not been sufficiently covered by new funding. It is an unfunded mandate of the Government’s making. (Conclusion, Paragraph 81)
Government response summary AI-generated
The Government did not address the conclusion regarding unfunded employer National Insurance Contributions, instead discussing the Business Rates Retention System reset in 2026, transitional arrangements, and future reset timings.
Summary of the government's response below — read the verbatim text to verify.
Government Response
Deferred
HM Government · verbatim extract
Deferred
40. At autumn Budget 2024, the Government set aside funding to support the public sector with the additional cost of employer National Insurance Contributions (NICs). The total support funding for the whole of the public sector amounted to £4.7 billion in 2025–26, inclusive of Barnett consequentials (the Barnett formula was applied in the normal way to changes in UK Government department budgets). This funding was based on an estimate of the proportion of employer NICs receipts paid by public sector organisations, using the Office for National Statistics’ classification of the public sector boundary. This approach to estimating the cost of similar measures for public sector organisations is in line with the approach taken under the previous government. The total £4.7 billion support funding in 2025–26 (including Barnett consequentials) was allocated to departments and other public sector employers at Main Estimates 2025–26 based on each employer’s total share of headcount, wa
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