Councils, charities and public sector groups join Swinney to call for NI funding
The Chancellor announced the increase to employer’s national insurance contributions in the October budget.
Local authorities, charities and public sector organisations have joined with First Minister John Swinney to call for funding to mitigate the national insurance hike.
In a letter from Mr Swinney and the president of local authority body Cosla, Shona Morrison, to Chancellor Rachel Reeves, the UK Government was urged to take an “actual cost approach” to the increase.
In her October budget, the Chancellor announced an increase to employer national insurance contributions, but released funding to mitigate the rise in the public sector.
Scotland’s larger public workforce means that the population share of the funding – between £290 and £350 million – would not cover the increase, the letter says.
The Scottish Government has claimed the hike could cost as much as £700 million, with a further £75 million hitting the charity sector.
The letter, which was backed by 48 organisations from the public and third sector including the Scottish Trades Union Congress (STUC), Scottish Women’s Aid, Rape Crisis Scotland and the Scottish Council for Voluntary Organisations (SCVO), pushed for more cash ahead of the finalising of the Scottish budget at the end of February.
The letter said: “Whether applied to public sector employers, or a broader public services cohort of employers, a Barnett share of the funding which is made available based on the actual costs to UK departments and local government in England will fall some considerable way short for Scotland given our relatively larger public sector workforce.
“As a result, such an approach would see the Treasury essentially profit from public service employers in Scotland, while the equivalent employers in England are fully reimbursed.
“We ask you therefore to consider carefully the case for taking an actual costs approach to the additional funding to be provided, and to confirm this before the final stages of the Scottish budget to allow us to plan appropriately.
“The impact for our communities and for the effective management of public finances will otherwise be highly damaging.”
The Scottish Government and Cosla invited the Chancellor and her officials to take part in “detailed discussions”, adding they would “welcome meaningful dialogue”.
A UK Government spokesperson said: “The budget delivered more money than ever before for Scottish public services and the Scottish Government receives over 20% more funding per person than equivalent UK Government spending.
“It is for the Scottish Government to allocate this across its own public sector and meet the priorities of people in Scotland.
“It will also receive additional Barnett funding on top of this record £47.7 billion settlement as part of support provided in relation to changes to employer national insurance.”
