Local Government: Employers' Contributions
The question
To ask the Secretary of State for Housing, Communities and Local Government, pursuant to the Answer of 19 February 2025 to Question 30736 on Local Government: Employers' Contributions and with reference to paragraph 5.48 of Bedford Borough Council Executive's report entitled General Fund Revenue Budget 2025/2026, dated 22 January 2025, and paragraph 1.5.3 of Central Bedfordshire Council's report entitled Budget Report 2025/26 to 2028/29, dated December 2024, for what reasons the additional funding for employer National Insurance contributions paid to (a) Bedford Borough Council is £500,000 less than the estimated total cost for directly employed employees and (b) Central Bedfordshire Council is £1.2m less than the estimated additional cost for Central Bedfordshire Council staff.
Answered by Jim McMahon
Additional funding for employer National Insurance contributions (NICs) has been determined based on a national assessment of the costs for directly employed staff. The grant distribution methodology has been published in an explanatory note on the government website: https://www.gov.uk/government/publications/updated-explanatory-note-on-the-employer-national-insurance-contribution-grant-2025-to-2026.
We recognise the challenges that local authorities are facing as demand increases for critical services. That is why the government is providing an additional £2 billion of grant funding through the Settlement, which includes £502 million of additional grant funding to manage the impact of employer NICs changes on council budgets, and £13 million for combined authorities, totalling £515 million. The final Settlement for 2025-26 makes available over £69 billion for local government, which is a 6.8% cash terms increase in councils’ Core Spending Power on 2024-25.
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