Local authorities face a £96m budget gap due to NIC increases. This could lead to service cuts and tax rises despite partial government funding.
The change will raise £25.7 billion for the treasury. However, warnings say job losses might occur. Scotland thinks employer NIC increases will cost £550m for public sector workers alone. It rises to £750m with other workers included.
The government wants to help local groups plan, said Ms. Robison. She will fund 60% of costs across all departments. This adds £144m for local government. It equals a 5% national council tax increase. This should help councils avoid big tax hikes and ease pressure on local tax decisions.
Yet, this will not fix the crises, said Councillor Hagmann. Hagmann speaks for COSLA resources. The government will fund 60% of staffing costs. These costs come from the UK’s employer NIC rise. The remaining 40% lacks funds.
Councils must still find £96m in budgets. The UK may announce more money later. But commissioned services get no added funds. Crucially, adult social care is in this category. This funding will not solve the crises for councils and communities.
These crises worsen due to the employer NIC increase. Councils must make hard choices. They must protect essential frontline services. Cosla says the funding gap is £236m. This includes all council services costs, including leisure and cultural groups. It equals an 8.2% council tax increase before considering other pressures.