In their Autumn Statement the Labour Government announced that employers National Insurance contributions would rise by 1.2% – and the threshold at which employers begin to pay National Insurance on employees earnings will be lowered to £5000.
These changes will come into effect in April 2025.
Some public sector employers are exempt from the changes, such as principal local councils. However many vital services – such as social care providers – are not exempt and will be hit by significant extra costs in April that will effect frontline services.
The below Council Motion is from Sheffield Liberal Democrats and calls on the Government to exempt social care providers from the national insurance rises. You can find the original motion here.
Please add to the template motion with local figures if you have them, and change the format accordingly if your council presents motions in a different way. There are also some interchangeable paragraphs showing the impact in England, Scotland and Wales which you will need to delete accordingly.
This Council notes that:
- From April 2025 National Insurance employer’s contributions (NICs) will rise by 1.2%
- From April 2025 the secondary threshold will be lowered meaning that employers will start to pay NICs on employees’ earnings from £5000 instead of the current £9100
- The Chancellor has recognised “there will be consequences” as a result of the Budget announcements regarding employer NICs
- Analysis from the Nuffield Trust shows that changes to employer NICs will cost the adult social care sector more than £900m next year.
- The same report shows the total burden on the 18,000 independent organisations providing adult social care in England will be £2.8billion in the next financial year (for England)
- Care Forum Wales has calculated that this will contribute to a £150 million funding gap in care services across Wales (for Wales only)
- In Scotland the funding gap this will leave for NHS and care services is estimated to be over £170 million a year (for Scotland)
- In response to the Nuffield Trust’s analysis, the Local Government Association have stated that asked for “immediate adequate investment is needed in order to address unmet and under-met need and ensure timely access to social care for all who need it”
This Council believes that:
- Subjecting social care providers to higher taxes is counterproductive and will worsen the health and care crisis
- Social care services are provided by a range of organisations including hospices and the voluntary sector, and all but the very smallest will be hit by the employers’ NICs increase
- The Government’s lack of ambition and deafening silence on social care is disappointing;
- GP surgeries and many health and care providers will not be shielded from the full force of this tax increase and will have no choice but to cut services and staff numbers
- Ultimately, people in care will suffer the consequences of these employers’ NICs rises
This Council resolves to:
- Call on the Government to exempt social care providers from the increase in employers’ NICs
- Call for cross-party talks on social care immediately to deliver the sector long-term, sustainable funding
- Ask the Leader of the Council to forward a copy of this motion to the Chancellor
Sources
- Summary of changes to Employer NICs here
- Comments from Chancellor Rachel Reeves here
- LGA response to the NIC changes here
- Nuffield Trust report analysing the impact on social care providers here (England stats)
- Care for Wales estimate on the impact in Wales here (Wales stats)
- Various estimates on the impact in Scotland from Scottish Care and University of Strathcylde (Scotland stats)