Scottish public sector and voluntary groups join calls for National Insurance funding

Public sector and voluntary organisations in Scotland have come together to raise their “deep concern” over the impact of the impending hike in National Insurance.

Organisations from across civic society have backed a letter to UK Chancellor Rachel Reeves from First Minister John Swinney and Cosla, the council umbrella body.

Among those expressing their support are the Scottish Trades Union Congress (STUC), British Dental Association, Scottish Fire and Rescue Service, and Colleges Scotland.

The letter urges the UK Government to take an “actual cost approach” to the increase.

In her October budget, the Chancellor announced an increase to employer National Insurance contributions, but released funding to mitigate the rise in the public sector.

But Scotland’s larger public workforce means that the population share of the funding – between £290 and £350 million – would not cover the increase, the letter says.

The Scottish Government has claimed the hike could cost as much as £700 million, with a further £75 million hitting the charity sector.

The letter, which is backed by 48 organisations from the public and third sector, pushes for more cash ahead of the finalising of the Scottish Budget at the end of February.

It says: “Whether applied to public sector employers, or a broader public services cohort of employers, a Barnett share of the funding which is made available based on the actual costs to UK departments and local government in England will fall some considerable way short for Scotland given our relatively larger public sector workforce.

“As a result, such an approach would see the Treasury essentially profit from public service employers in Scotland, while the equivalent employers in England are fully reimbursed.

“We ask you therefore to consider carefully the case for taking an actual costs approach to the additional funding to be provided, and to confirm this before the final stages of the Scottish Budget to allow us to plan appropriately.

“The impact for our communities and for the effective management of public finances will otherwise be highly damaging.”

The Scottish Government and Cosla invited the Chancellor and her officials to take part in “detailed discussions”, adding they would “welcome meaningful dialogue”.

Earlier this week, The Scotsman revealed the Church of Scotland is facing an additional social care bill of almost £1 million as a result of the hike in National Insurance.

Mr Swinney said: “We are disappointed that the UK Government did not engage with the Scottish Government on the change to employers’ National Insurance contributions and we are concerned about the additional pressure it places on all employers. The Scottish Budget is expected to pass within weeks, and alongside local authorities, we need clarity.”

A UK Government spokesperson said: “The Budget delivered more money than ever before for Scottish public services and the Scottish Government receives over 20 per cent more funding per person than equivalent UK Government spending. It is for the Scottish Government to allocate this across its own public sector and meet the priorities of people in Scotland.

“It will also receive additional Barnett funding on top of this record £47.7 billion settlement as part of support provided in relation to changes to employer National Insurance.”