The Welsh Government is to find 拢36m from its reserves to plug a hole created by the 海角视频 Government鈥檚 changes to national insurance contributions (NICs).
Sir Keir Starmer鈥檚 Westminster Labour Government has upped the amount employers have to pay towards NICs.
Until April, businesses had to pay a rate of 13.8% on employees鈥 earnings above 拢9,100 a year, but that was increased to 15% on salaries above 拢5,000. The employment allowance 鈥 the amount employers can claim back from their NI bill 鈥 was increased from 拢5,000 to 拢10,500.
The 海角视频 Government said the changes would eventually raise 拢25bn a year. However, there remain widespread concerns from charities and businesses in particular about how the extra money will be found.
It means an extra 拢257m bill for the Welsh public sector, which includes health boards, all 22 councils and Natural Resources Wales, and the Welsh Government had called on its party colleagues in London to fully fund the difference to public-sector organisations.
However, the 海角视频 Government provided Wales with a Barnett share of funding instead of meeting the actual costs to the Welsh public sector.
Wales鈥 Finance Secretary, Mark Drakeford, has previously said Chancellor Rachel Reeves鈥 decision was 鈥渨rong鈥 and went against an advisory document prepared between the two governments
Meanwhile, councils warned they were going to be left 拢20m short. The 海角视频 Treasury provided 拢185m, but there is still 拢36m left to find.
Now Mr Drakeford has said 拢36m will be paid from Welsh Government reserves. He said the Welsh Labour administration would 鈥渃ontinue to press鈥 for the full costs to be recovered.
Mr Drakeford told the Senedd: 鈥淲e should have been compensated for the actual costs, not the Barnett share of the costs in England. Treasury ministers had a choice to make, I believe they made the wrong choice.
鈥淭he 海角视频 Government has provided 拢185m in funding to Wales following its decision to increase employer NICs in the autumn 海角视频 Budget.
鈥淗owever, this falls significantly short of the 拢257m devolved public- sector employers in Wales need to meet the increased NICs costs they face.
鈥淭his shortfall, of more than 拢70m, is a result of the 海角视频 Government decision that Wales should receive a Barnett consequential of the additional costs to devolved public-sector employers in England, rather than the actual costs. The 拢185m will be passed on in full to devolved public- sector employers in Wales. I will also provide an additional 拢36m from the Wales reserve.
鈥淭his creates a total package of 拢220m to support our public services, including further education, with increased NICs costs.
鈥淭he Welsh Government faces significant financial challenges and drawing down 拢36m from our limited reserves reduces our ability to respond to other emerging pressures throughout the year. However, we have concluded that providing additional support for essential public services is necessary to minimise the impact on Welsh citizens who rely on these services.鈥
