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

Business Services Senior Co-ordinator

Durham County Council
Grade 7 £31,015 - £34,811
Are you an experienced administrator who enjoys supporting people, leading a team and making sure services run smoothly? A fantastic opportunity has Durham
Recuriter: Durham County Council

School Secretary

Durham County Council
£26,403 - £28,598 pro rata (pay award pending)
Required from 1st November 2026   Kirk Merrington Primary School are looking to appoint a full-time school secretary due to the retirement of the curr Spennymoor
Recuriter: Durham County Council

Fleet Hire Desk Assistant

Durham County Council
£27,274 - £29,542
The Fleet Operations Team in Fleet and Depot Management are looking for a Fleet Hire Desk Assistant to join their team.   To assist the Fleet Services Durham
Recuriter: Durham County Council

Teaching Assistant

Durham County Council
£25,185 - £25,989 pro rata (pay award pending)
This role is permanent, term time only plus 2 weeks, 37 hours per week. We are looking for an experienced and qualified Teaching Assistant, who is hi Durham
Recuriter: Durham County Council

Classroom Teacher

Durham County Council
£32,916 - £45,352 pro rata (pay award pending)
Required
Recuriter: Durham County Council
Linkedin Banner