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
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.
Government Response
Deferred
HM Government
Deferred
68. The Government acknowledges concerns around potential ‘cliff edges’ around resets. For the reset in 2026, to minimise the risk of these cliff edges, the Government intends to consider the impact of the reset within the design of transitional arrangements. We have invited views in the consultation on a package of transitional arrangements that enable local authorities to plan for these changes. 69. To provide certainty to the sector and continue to reward local authorities for business rate growth, the Government proposes that, following the reset in 2026–27, the Business Rates Retention System will not be reset again within the remaining years of multi-year Settlement. 70. Government will confirm the timing and design of the next reset by the end of the next multi-year Settlement period. Whilst we understand the interest in the sector around the details of the next reset being proposed as soon as possible, taking further time will allow reset periods and the design of future resets – including the potential delivery of a phased reset - to be considered alongside the delivery of the first Reset, wider improvements to the Business Rate Retention System and the Government’s commitment to transforming Business Rates.