Dan Peters 30 October 2024

Budget: Minimum wage and National Insurance rises to hit councils

Budget: Minimum wage and National Insurance rises to hit councils image
Image: Laurence Berger / Shutterstock.com.

Chancellor Rachel Reeves has confirmed rises to the minimum wage and employers' National Insurance contributions, piling further pressure on council budgets.

The minimum wage for over-21s will increase from April by 6.7% while councils' National Insurance contributions will rise from 13.8% to 15% by April.

Councils have said that supporting those on the lowest pay is not only fair but improves the motivation, loyalty, productivity and retention of hard-working staff.

However, the increase in the minimum wage from £11.44 to £12.21 per hour – worth up to £1,400 a year for a full-time worker – will make balancing budgets harder.

The increase – more than three times the current rate of inflation – comes after Labour changed the remit of the Low Pay Commission so that for the first time it took into account the cost of living when it agreed wages for the lowest paid.

Reeves said the wage increase would ‘support people with the cost of living' and ‘protect' workers.

On increasing employers' National Insurance contributions, Reeves said: ‘I do not take this decision lightly. I know there will be impacts of this decision beyond businesses too. In the circumstances I have inherited it is the right choice to make.'

She added opposing the National Insurance increase would lead to more ‘austerity, chaos and instability'.

The Government has not explicitly pledged to fund the National Insurance rise for councils but the sector's Departmental Expenditure Limit for 2025-26 will increase to £14.3bn, which includes an additional £1.3bn of additional grant funding for services.

SIGN UP
For your free daily news bulletin
Highways jobs

Solicitor/ Barrister / Chartered Legal Executive Commercial & Contracts (x2)

Warwickshire County Council
£50,856 to £57,083 per annum
Warwickshire Legal Services (WLS) are looking for two qualified lawyers to join their award-winning, motivated, and nationally recognised legal team. Warwick
Recuriter: Warwickshire County Council

Head of Finance and Deputy s151 Officer

Conwy County Borough Council
£77,153 - £88,545
We are looking for an experienced and strategic financial leader who can operate confidently in a complex, political and fast-changing environment. Colwyn Bay, Conwy
Recuriter: Conwy County Borough Council

ICT Engineer Digital Squad

Durham County Council
£35,412 to £39,152 p.a. (Pay Award Pending)
An exciting opportunity has arisen within the Microsoft 365 Team for an ICT Engineer (Microsoft 365). This role will support Durham County Council's B Durham
Recuriter: Durham County Council

Storekeeper Driver

Durham County Council
£26,403 - £28,598
An opportunity has come up in Highways Services for a Storekeeper/Driver.  They will assist the Stores Supervisor in delivering a customer focussed St Durham
Recuriter: Durham County Council

Care Support

Durham County Council
Grade 4 £25,583 - £26,824 (pay award pending)
We're recruiting to a permanent role within our Pathways Service, which delivers day services to adults with complex needs, Monday to Friday. There i Durham
Recuriter: Durham County Council
Linkedin Banner