Brighton and Hove faces financial strain as national insurance rises impact school and council budgets, raising concerns among officials.
They were hoping the rise from 13.8% to 15% wouldn’t hurt them too much. But now, it looks like they’ll be millions of pounds short.
To make matters worse, the threshold for paying the higher rate is dropping. Employers will start paying more on wages over £5,000 instead of the previous £9,100.
This change is expected to add at least £4 million to the council’s wage bill. The government promised some funding to help, but it only covers about 60% of that increase.
And when you factor in contractors and suppliers, the financial strain gets even worse. This was a hot topic at a recent meeting of the Brighton and Hove Schools Forum.
Finance chief Nigel Manvell shared the tough news with heads and governors. He mentioned that the national insurance increase might not even be included in next year’s budgets.
Aaron Barnard from Aldridge Education Trust raised concerns about how this would affect school budgets. He noted that a catering contractor had already warned about rising costs due to the national minimum wage and national insurance hikes.
While there’s a vague promise from the Department for Education to help with the increase, Barnard worries about the ripple effects on contractors and services.
The council has a hefty £243 million budget for schools this year, mostly funded by a government grant. But Manvell is particularly worried about adult social care providers.
With the national living wage going up by 6.7%, balancing costs is going to be a challenge. Some providers can manage with self-funding residents, but many can’t.
Adult social care is a major budget concern, with an £8.7 million pressure predicted for the 2025-26 financial year. This year, the council planned to spend £189 million on adult social care.
Next week, they’ll unveil the budget for the upcoming year, which will be scrutinized in two committee meetings on February 7.
