National Insurance rise left £600,000 funding gap for Telford council to fill

To partly offset this the council has received a grant of £1.588m but that left it with a funding gap of some £600,000 – which it has had to cover during its own budgeting process.

The increase has also hit other public bodies including Shropshire Fire & Rescue Service which has been left with is £150,000 shortfall after receiving a grant of £150,000 for a NICS increase of £300,000.

Shropshire Fire & Rescue Service last week decided to increase its precept by 4.33 per cent after hearing that a lower increase of 2.99 per cent would leave a funding gap.

Telford & Wrekin council’s cabinet set the council’s £180m revenue budget and a council tax increase of 4.99 per cent it met on Thursday.

The council leader says that overall the Government has given it the “best financial settlement than we have seen for well over a decade.”

Council budget papers reveal that the increase in employers National Insurance Contributions from 13.8 per cent to 15 per cent from April 2025 will also have a knock on effect on demands from its contractors and service providers.

An increase in the National Living Wage by 6.7 per cent to £12.21 per hour “is likely to result in increased costs to the Council through contractors/service providers increasing costs.”

Council budget papers also reveal that the council is continuing to face huge increases in the cost of care, as well as £1.8million of inflation pressures from major contracts and pay of £4.409m.

At Thursday’s budget meeting the council’s Labour leadership were pleased to present a “balanced budget” while keeping some in reserve.

Opposition leaders were critical of council borrowing and that social care funding has not been solved.

Councillor Lee Carter, Leader of the Council, said Telford & Wrekin has set a ‘balanced and positive budget’ which ‘invests in what people care about most.”

Councillor Carter said: “We will demonstrate a tireless commitment to create jobs and homes, improve transport, town centres and greenspaces and look after our most vulnerable in our society by investing in social care.

“At Telford & Wrekin Council we have a proud record of sound financial management and this track record has put us in a much stronger position than many.

“This positive local management together with the best financial settlement from Government than we have seen for well over a decade, we have real reason to be optimistic.

“The Government is also now committed to multi-year settlements and we look forward to hearing more about this in the coming months ahead of future budget setting processes where we will be able to plan for the borough’s future with confidence over a number of years.”