Budget's National Insurance increase will cost Bedford council around £600k

But the government said it will provide support to the public sector for additional employer National Insurance costs (NICs).

In the Autumn Budget 2024 it was announced that the government is increasing the rate of employer Class 1 National Insurance contribution rates from 13.8 per cent to 15.0 per cent.

It is also reducing the per-employee threshold at which employers become liable to pay National Insurance (the Secondary Threshold) from April 6, 2025 from £9,100 to £5,000 a year.

A Ministry for Housing, Communities and Local Government (MHCLG) spokesperson said: “Despite the difficult financial inheritance, this government has given councils £1.3bn to deliver essential services, alongside further investment to ease the pressures they face in areas like homelessness and special educational needs provision.

“We will provide support to the public sector for additional employer NICs costs, including in local government.

“This support applies to those directly employed by the public sector,” they said.

A Bedford Borough Council spokesperson said: “The cost of increasing the employers’ national insurance rate from 13.8 per cent to 15 per cent will cost in the region of £600,000.

“MHCLG has confirmed that funding will be made available to public service organisations for the cost arising from direct employees, and will be working with the Treasury to allocate funding to local authorities.”

There is also an increase in the minimum wage from £11.44 to £12.21 per hour, which is worth up to £1,400 a year for a full-time worker.

The council did not respond at the time of publication whether this would also have an impact on its budgeting.

But its pay policy statement 2024/25 states that it has taken account of the National Living Wage which came into effect on April 1, 2016.

The real Living Wage is a voluntary wage rate set by the Living Wage Foundation

The pay policy adds that it has also agreed that with effect from April 1, 2014, employees will receive a rate of pay at the Voluntary Living Wage where the substantive grade for the post falls below that level.

This is paid as a Living Wage Supplement and calculated as the difference between the current salary and the current voluntary living wage.

The council said its practice is to review the implementation of the annual uplift payment as provided by the Living Wage Foundation each year.

As of October 2024, the Real Living Wage is £12.60 per hour across the UK and £13.85 per hour in London.