• Ministers considering 5%-6% council tax rise to cover it
• Labour councillors call for budget implications to be addressed at Policy & Resources Committee

Barnet’s Labour councillors have revealed that the Government’s 1.25% increase in national insurance contributions (NIC) to fund social care will cost Barnet Council an estimated £600,000 in employer contributions. The information was requested from Barnet’s finance officers who replied:

“£600k estimated – it is supposed to be net neutral for public sector, i.e. we may get funding for it. It is very likely we will see this cost come back to us indirectly via the supply chain – even if contracts aren’t up for renewal (for sustainability reasons) and it’s difficult to predict a cost for this at the moment.”

In the last week, the Telegraph and Express newspapers have both reported that Ministers are considering a 5-6 per cent council tax increase to cover the cost to local authorities.

At last night’s Adults & Safeguarding Committee (14 Sep) Labour councillors called for the budget implications of the NIC rise to be addressed by the next Policy & Resources Committee (30 Sep).

Barnet Labour Adults & Safeguarding spokesperson, Cllr Paul Edwards said: “This grossly unfair national insurance increase hits the wage packets of the very low paid care workers it is designed to help. It’s basically making them pay for their own wages.

“It also has implications for the adults’ social care budget and its ability to address the demands that will come from commissioned providers.

“The Council already predicts an overspend of £1.169m for adults’ social care without the impact of this new tax. Furthermore, it’s clear that the NHS is going to be the principal beneficiary of the NI increase – not social care.

“It’s going to have an enormous impact on the local care market, with over 200 CQC registered providers, including a significant number of sole providers. It is difficult to imagine any of the 200 providers being either willing or able to absorb these additional costs, which means the costs will come back to the Council as prices increase.”

Ends.

Notes:

1. Details of the Adults’ social care overspend can be found on p7 para 3.1 of the Q1 performance report for Adults’ social care (Agenda Item 10): https://barnet.moderngov.co.uk/documents/s66545/Quarter%201%20Q1%202021-22%20Delivery%20Plan%20Performance%20Report.pdf

2. The Telegraph and The Express coverage of the potential council tax increase can be found here:
https://www.express.co.uk/finance/personalfinance/1490857/council-tax-warning-bills-rise-increase-national-insurance-contributions
https://www.telegraph.co.uk/politics/2021/09/10/council-tax-bills-will-rise-millions-pay-social-care/

To contact Cllr Edwards: cllr.p.edwards@barnet.gov.uk