The Welsh Government remains in the dark about how much Wales will receive to cover the estimated 拢109m cost of the rise in employer national insurance contributions in the public sector, a committee heard. Jayne Bryant said the 海角视频 Government has confirmed it will provide funding to public-sector employers towards the increased cost of tax which comes into effect in April
But Wales鈥 local government secretary said ministers expect to receive additional funding in 鈥渓ate spring鈥 and have not yet received confirmation of how much Wales will receive.
Plaid Cymru鈥檚 Si芒n Gwenllian raised concerns about the impact of tax hikes as the Senedd鈥檚 local government committee scrutinised Welsh ministers鈥 2025/26 spending plans.
Judith Cole, deputy director of council finance policy, said the Welsh Government estimates the cost of the tax hike to the public sector in Wales at 拢109m.
Ms Gwenllian called for clarity, asking: 鈥淪o, there鈥檚 no, absolutely no talk of the 海角视频 Government providing that 拢109m?
鈥淭he Welsh Local Government Association was under the impression that this money was going to come and that it was 拢109m. So, you鈥檙e saying today that that is not the picture?鈥
Ms Cole replied: 鈥淣o, I would never do that 鈥 I would never get out of the building alive 鈥 海角视频 Government has said that funding will come to Welsh Government to fund the costs. The discussions are still ongoing about what that actual sum is.鈥
Ms Bryant added: 鈥淎ll I can say is that once we know we will share that.鈥
Last month, Finance Secretary Mark Drakeford confirmed Wales is expected to receive funding via the Barnett formula, which would be based on spending in England.
The former first minister warned this could be 鈥渇undamentally unfair鈥, with English public bodies receiving 100% compensation while funding may not match the need in Wales.
Asked how funding will be divided between councils, Ms Cole said the standard funding formula could be used or it may be based on a proportion of spending as in England.
But she stressed that other factors need to be taken into account because, for example, some councils will provide more services by directly employed staff.
Reg Kilpatrick, director of local government, added: 鈥淲e鈥檙e entirely dependent on the negotiations between the cabinet secretary for finance and the 海角视频 treasury.鈥
Ms Gwenllian warned of the impact of tax hikes on the voluntary sector and outsourced services, piling more pressure on council budgets.
鈥楻别补濒颈迟测鈥
She said: 鈥淚鈥檝e spoken with three councils 鈥 but one said that this will cost an additional 拢2m in terms of internal salaries but 拢2.5m in terms of the work that is commissioned.
鈥淎nother council said 拢5.4m on the internal, 拢2.8m on the work that is outsourced 鈥 another said 拢8m internal and 拢3m on the outsourced work. There is a lot of work commissioned beyond the local authorities themselves and there is no mention of any support.鈥
The Conservatives鈥 Peter Fox agreed, raising Wrexham council鈥檚 evidence that about 80% of domiciliary care is commissioned and the public purse will ultimately foot the bill.
He said: 鈥淚f national insurance isn鈥檛 fully covered for direct employees and those associated businesses, we鈥檙e going to end up taking away all of the cash increase that this new budget, this better budget is going to give to service that one element. 鈥 that looks like the reality.鈥
Giving evidence on January 15, Ms Bryant said the 海角视频 Government has confirmed it will use the Office for National Statistics definition of a public sector worker.
鈥楴othing can be confirmed鈥
Mr Kilpatrick added that Mark Drakeford, the finance minister, is extremely aware of the issue which forms part of ongoing discussions with the 海角视频 treasury.
Labour鈥檚 Carolyn Thomas raised concerns about the variability of reserves, which she said range from about 拢6m to 拢250m across Wales.
She asked about calls for a funding floor, with provisional increases in funding for the 12 months from April ranging from 2.6% in Monmouthshire to 5.6% in Newport.
Ms Bryant said: 鈥淕iven the range鈥, the government is open to considering providing an additional funding floor at the final budget 鈥 but nothing can be confirmed at the moment.鈥
Responding to Plaid Cymru and Conservative calls for an overhaul of the formula used to allocate funding to councils, she said the complex calculation is reviewed every year.
