Jobs Tax puts vital frontline services at risk in Pembrokeshire – Paul Davies MS

Local Senedd Member for Preseli Pembrokeshire has written to the Leader of Pembrokeshire County Council to raise concerns about the impact of a £72 million shortfall in employer National Insurance (NI) funding on council budgets. The shortfall follows the decision by Labour Chancellor Rachel Reeves to increase employer NI contributions without passing on full funding to local authorities.

The NI increase means employers must now pay more to employ staff – whether they’re small businesses or large public sector bodies such as local councils. At the time, Labour’s Finance Secretary, Mark Drakeford, gave assurances that Wales would receive additional funding to cover these higher costs in the public sector. In November, he said:

“The Treasury has said today that there will be additional funding for public sector workers to cover the costs of employer national insurance contributions… it will provide full funding to deal with the national insurance contributions of employers in those circumstances.”

However, earlier this week, Mr Drakeford revealed that the UK Government would not, in fact, pass on the full funding – leaving a £72 million shortfall across Wales’s public services.

Commenting, Paul Davies said:

“Local authorities are already under significant pressure and the lack of funding from the Welsh Government to help council bear the brunt of these tax increases is bitterly disappointing, especially as the Cabinet Secretary for Finance and Welsh Language promised to cover these costs.

“I’ve written to the Leader of Pembrokeshire County Council because I’m concerned about the council’s ability to maintain essential services such as social care, bin collections, and road maintenance.

“If the Council does not receive the support promised by the Welsh Government, it faces the choice between cutting services or raising revenue via local taxation. This situation has arisen because of the decisions taken by the UK Labour Government – decisions that threaten the sustainability of some of our local public services.”