The Scottish government is set to receive an additional £300m to cover the increase in employer National Insurance contributions, according to sources cited by the BBC. Treasury officials are reported to have informed their Edinburgh counterparts that between £295m and £330m would be available, though the Scottish government maintains that the tax hike would cost it £500m. Chancellor Rachel Reeves announced the increase in last month’s UK Budget in order to boost public service funding. She later stated that £3.4bn in additional funding would be provided to Scotland in 2025-26, though she did not suggest this would compensate for National Insurance, adding that Holyrood ministers should spend the money “wisely”.
UK government sources have now informed the BBC that Holyrood will receive “hundreds of millions of pounds”, indicating that the Scottish government will have “in total over £5bn extra to spend as a result of the UK budget”. The sources added that Scots had “no more excuses” and wanted the Scottish National Party (SNP) to reduce waiting times in the NHS and raise school attainment rather than filling in a “budget black hole created by years of financial mismanagement and waste”. The Scottish government is also set to receive an additional £1.5bn for this financial year, 2024-25, though it claims this is in line with its expectations.
National Insurance contributions are the second-largest revenue stream in the UK behind income tax, with workers, the self-employed and employers all required to pay. The contribution affects those working for the Scottish government in the public sector, which employs around 600,000 people in Scotland – 22% of the total workforce compared with 17% in the UK as a whole. SNP members have warned that Scotland could be under-compensated if National Insurance compensation is not proportionate to the public sector, with Scottish Finance Secretary Shona Robison calling for “clarity” on mitigation
Read the full article from The BBC here: Read More
