Concern over NI contribution increase

An increase in national insurance contributions places an “additional financial burden” on businesses, councillors say.

They warn it could also lead to increased operating costs for those provisioning essential services including adult and children’s care, and home-to-school transport.

Chancellor Rachel Reeves announced in October’s budget that employer national insurance contributions would rise from 13.8 percent to 15 percent in 2025, with payments starting when an employee earns £5,000, down from £9,100.

In a motion being put before a full meeting of Worcestershire County Council this Thursday (January 9), Tory councillors express “serious concern” over the policy.

They say it will “significantly raise operating costs for local employers, particularly those

providing essential services in adult and children’s care, as well as home-to-school transport”.

“The increase in national insurance places an additional financial burden on businesses already managing tight budgets,” says the motion in the names of councillors Adam Kent, Bob Brookes, Jo Monk, Steve Mackay, Richard Morris and Scott Richardson Brown.

“For service providers in adult and children’s care, this could mean difficult choices between absorbing increased costs or passing them on to local authorities and families – resulting in higher costs for the care our communities rely on.

“Similarly, for home-to-school transport providers, these additional costs will likely lead to higher contract rates, putting further pressure on council budgets and potentially impacting service quality and availability for Worcestershire residents.”

They want Worcestershire MPs to lobby the government for a U-turn on the national insurance increase, and to highlight the “unintended consequences for local care services, transport costs, and the broader business community”.

A spokesman for the Treasury said: “We delivered a once-in-a-parliament budget to wipe the slate clean and deliver the stability businesses so desperately need.

“The independent OBR (Office for Budget Responsibility) confirmed that it delivers lower unemployment and higher wages over the coming years, and more than half of employers will either see a cut or no change in their national insurance bills.”