The Scottish government has announced a substantial financial package to support local authorities in managing increased National Insurance contributions.
Finance Secretary Shona Robison revealed a £144 million funding allocation designed to cover approximately 60% of additional employment costs across Scottish councils, the BBC reports.
The proposed funding responds to recent changes by the UK government, which include raising employer National Insurance contributions from 13.8% to 15% and lowering the employer contribution threshold from £9,100 to £5,000.
These modifications are expected to create significant financial pressure on local councils and public sector organisations.
The estimated total cost of increased contributions ranges from £550 million to £750 million, presenting a considerable challenge for Scottish public finances.
While the Treasury has suggested compensation around £300 million through the Barnett formula, the Scottish government argues this falls short of the actual expenses.
Robison has publicly stated that the proposed compensation is “unacceptable” and has called for full funding of public sector costs.
The financial package represents a strategic approach to managing potential economic pressures on local authorities and maintaining public service stability.
The funding aims to prevent significant council tax increases and provide financial breathing room for local authorities facing mounting employment-related expenses.
By addressing these financial challenges, the Scottish government demonstrates its commitment to supporting local public services and minimising potential economic strain on councils.
