CRITICAL - Employers national insurance contributions and local councils

A message from the CEO of NALC, Jonathan Owen.

As you will know there were significant changes to employers national insurance contributions in last week's budget. We have been pressing MHCLG officials for clarification and after initially saying they thought our councils would be compensated they emailed us yesterday the following unhelpful reply:

"Following up on our exchange yesterday about this, I wanted to confirm the position we've got to with Treasury on the Budget increase in Employer National Insurance contributions and what it means for parish and town councils. I'm writing to confirm that town and parish councils will not be included in a package to compensate public sector bodies for this rise.

The policy set by the Chancellor is to compensate those who are direct public sector employees funded out of public money. Parish councils are not directly funded by central government and so do not fall into this category. I know that's not the answer you were hoping for.

We recognise that this will require town and parish councils to make some difficult financial decisions, and in particular that many may need to raise their precept, and that some may need to make staffing cuts in order to meet these new costs. We understand neither of these decisions will be taken lightly by your members."

We will of course be challenging some of the thinking behind this and implications for the sector when we meet them later this week and have provided them with the following further information"

NALC have outlined their intial planned actions on this issue, but clearly it is very early days. However, there is limited time to act and so we are broadly supportive of NALC's plans outlined below, but would like to see more "people power", i.e. councillors from across the land making their voices heard. NALC's next steps are:

Briefing to CALCs and councils, including possible guidance for budget setting

Letter to treasury

MHCLG meeting Thursday

Super councils next week

Ongoing dialogue with LGA and SLCC, explore support for NCVO campaign