The massive impact on the public purse from the UK government’s national insurance hike is expected to blow a £9 million hole in the Highland Council’s budget.
With 10,000 employees the local authority is especially vulnerable to the move by Chancellor Rachel Reeves – while the local authority’s in-house early learning and childcare providers could face a bill of around £600,000 alone.
Finance bosses say they do not expect any news to come forward about Westminster offsetting the charge before next spring – by which time the council will have long set its budget for the year.
The development was reported at Thursday’s full meeting of the council during a medium term update by Brian Porter, the chief officer of corporate finance.
He said: “There appears to be an acknowledged increase to the Scottish Budget for 2025/26, and expected additional funding for National Insurance increases, there also appears to be an expectation from Scottish Government that the funding for National Insurance is less than their estimation of cost.
“An important matter is also that the implications of National Insurance increases are not only those relating to the Council’s own workforce and pay bill. The cost of goods, services and contracts may all be impacted, with expectations or increases that may impact on the council going forward.
“It is unclear, and potentially unlikely, that any funding recognition of National Insurance costs addresses in full the implications across both council workforce and those wider impacts.”
