Decision Maker:

Outcome: Recommendations Approved

Is Key Decision?: No

Is Callable In?: No

Date of Decision: February 25, 2025

Purpose:

Content: The Council voted (6 voting in favour, 17 voting against, 1 abstaining from voting) on an amendment submitted by Councillor Cone, which was defeated.   The Council (unanimously) agreed the following motion:   “Council notes: -       That the Government, as part of the Autumn Budget 2024, announced changes to Employers National Insurance contributions (NICs), to be introduced in April 2025. -       From April Employer’s NICs will increase by 1.2% and the threshold at which employers must contribute to National Insurance will be reduced to all employees earning £5000 or more. -       This will have the effect of increasing the Council’s NICs by £376,000 (£332,000 on the General Fund and £44,000 on the HRA). -       Principal Authorities will be compensated for revenue lost as a result of this, but the Local Government Financial Settlement has demonstrated that this compensation will not be sufficient to make up for the NICs increase. The total compensation for the Council will be £220,000.   Council notes with concern: -       Despite the financial prudence of the Council, an additional £156,000 of South Cambridgeshire tax-payers money will have to be spent on employers’ NICs as a direct result of the Labour Governments decision not to fully compensate Principal Authorities for this change. -       This figure represents only the impact of the NICs increase on staff directly employed by this Council and does not account for the impact of the change on those employed by contractors or by other precepting authorities, such as the County Council, the Combined Authority or Town and Parish Councils.   Council believes: -       The Labour Government is jeopardising front-line public services across the country by not properly compensating local authorities for their tax increase. -       The Local Government sector is already under significant financial strain due to years of Conservative Government underfunding and cuts, coupled with an increased demand for key services. The failure to fully compensate for these changes only exacerbates the existing funding crisis and further strains key local services.   -       Public services, including those delivered by the local government sector and elsewhere, should be insulated from Labour’s tax rise.   Council therefore calls for: -       The Leader to write to the Secretary of State for Housing, Communities and Local Government, and to the Chancellor of the Exchequer, outlining the deep concerns we have as a Council about these changes and to implore the Government to provide full compensation to local authorities.”