Issue - meetings

To consider the following Motion in the names of Councillors Munro and J C Lawson;

“This Council notes:

1)    As part of the Autumn Budget 2024, the Chancellor Rachel Reeves announced a National Insurance increase and reduced the threshold at which employers start paying it. From April 2025, the rate of employers’ National Insurance contributions businesses will pay will increase by 1.2 percentage points to 15% and the earnings threshold at which companies pay will be lowered from £9,100 to £5,000. For an employee earning £30,000, the amount a business pays on National Insurance will increase by £865.80 under the new rules, increasing the total cost from £32,884.20 to £33,750. In addition, from April 2025, the National Living Wage (NLW) will increase from £11.44 to £12.21 per hour for all eligible employees;

2)    The new Labour government has claimed that the change to National Insurance contributions will generate an extra £25 billion in tax revenue, which will aim to make up for the £22 billion ‘black hole’ left by the previous government;

3)    Local authorities, including Kirklees Council, are responsible for assessing people’s needs and, if individuals are eligible, for funding their care. However, most social care services are delivered by independent sector home care and residential care providers, which are mainly for-profit companies, although also include some voluntary sector organisations.

This Council believes that:

1)      While the Autumn Budget earmarked £680 million of new grant funding to support social care (for both adults and children’s services) in 2025/26, the additional pressures on social care providers, including increasing the National Insurance contributions by 1.2%, a reduction in the threshold for employer National Insurance contributions and a 6.7% increase in the National Living Wage, will limit the impact of this funding and likely eradicate the extra £680 million allocated. It’s subjecting health services to higher taxes and is counterproductive, making it harder to provide care to older, vulnerable and disabled people;

2)    The Nuffield Trust estimate that the Employer National Insurance Contributions (ENICs) changes will cost independent sector social care employers in the region of an additional £940 million in 2025/26, on top of around £1.85 billion more that will be needed to meet new minimum wage rates. The Nuffield Trust say that the 18,000 independent organisations providing adult social care in England, which constitutes 98% of care providers, will be faced with increased costs of an estimated £2.8 billion in the next financial year. Public sector organisations, including the NHS, will be reimbursed the extra payments, but most care providers are run privately, so will be liable;

3)    Many social care providers, especially small providers, are now at risk of going bust as a direct result of the National Insurance hike and this could disrupt or end vital care for thousands of older and disabled people across the country, including residents in Kirklees;

4)    If local authorities, including Kirklees Council, are unable to pay social care providers higher fees, the vast majority of small providers who cannot absorb the extra  ...  view the full agenda text for item 18:

Motion Withdrawn.