Changes to NI contributions could cost council £2.5m

Twm Owen – Local democracy reporter

Changes to employer National Insurance contributions are likely to cost a council £2.5 million, though it expects this to be funded by the Welsh Government.

However Torfaen Borough councillors have been warned increasing the rate employers have to pay towards each staff member, from 13.8 per cent to 15 per cent, as well as lowering the threshold from which it applies from £9,100 to £5,000, could hit groups and charities that work with it and its private contractors such as care providers.

Extra costs

Finance chief Nigel Aurelius said the council will be “fully cushioned” for the £2.5m cost related to its own staff and said: “Both the UK Government and Welsh Government have been quite clear the intention is not to impact on cost related to public services.

“The concern really as such is the third sector and people we commission care from and contractors. That isn’t quite as clear but if they have extra costs the likelihood is they will try and pass that on, we will be keeping an eye on that.”

He said the council is hoping for “a little more clarity” on the impact on contractors and the voluntary, or third sector, when the Welsh Government publishes its budget for the 2025/26 financial year on December 10.

Impact

Labour member for Llanyrafon, David Williams, said he is on the board of the Torfaen Voluntary Alliance, which represents charities and third sector groups, and said it has been assessing the potential impact of the changes.

Blaenavon independent member Nick Horler had asked how the council expected the increased contributions to impact it when its cross cutting scrutiny committee was updated on the council’s preparations for the 2025/26 budget.

The committee has said the council’s Labour cabinet should consider any impact on the budget due to the increased contributions.