Local Government: Employers' Contributions
The question
To ask the Secretary of State for Housing, Communities and Local Government, with reference to the £515 million of new funding to support councils with the costs associated with the increase in employer National Insurance contributions, announced on 18 December 2024, whether she plans to continue this funding in local government finance settlements beyond 2025-26.
Answered by Jim McMahon
Raising the revenue required to fund public services and restore economic stability requires difficult decisions on tax, which is why the government is asking employers to contribute more. All of us rely on good public services.
We recognise the challenges that local authorities are facing as demand increases for critical services.
Taken together, the additional funding announced by the Chancellor at the Autumn Budget at the 2025-26 provisional Local Government Finance Settlement will provide over £5 billion of new funding for local services over and above local council tax. This includes an additional £2 billion of grant through the Settlement in addition to a guarantee that local authorities in England will receive at least £1.1 billion in total in 2025-26 from the new Extended Producer Responsibility for packaging (pEPR) scheme, and a further £233 million of additional funding for homelessness services.
Local authority funding decisions beyond 2025/26 are a matter for the multi-year spending review, which is due to conclude in Spring 2025.
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