NI decision could leave councils up to £20m short

COUNCILS in Wales could be left up to £20m short due to a decision by the UK Government over National Insurance contributions.

- RUTH MOSALSKI Political editor [e-mail]

Wales' finance secretary Mark Drakeford has already criticised the UK Government for the "wrong" decision and now the head of the organisation which represents Wales' councils has said it is "disappointing"

From the start of this month, the rate of employer's National Insurance contributions has increased.

The chancellor had said she would cover the cost of those rises for public sector workers, however, Mr Drakeford confirmed last week the chancellor Rachel Reeves has decided the money Wales will get will not be the full actual cost, but a share of the English costs, determined by the Barnett formula.

Public sector organisations in Wales include health boards, all 22 councils and Natural Resources Wales.

The Welsh Government has already said it thought that Welsh public sector organisations face a £253m hit due to the changes. Mr Drakeford said the chancellor's decision was "wrong" and went against an advisory document prepared between the two governments.

This major change mid-year and after budgets had been set was frustrating, Andrew Morgan, the leader of Rhondda Cynon Taf council and the Welsh Local Government Association said.

He said it is now up to Welsh Government to decide how to distribute the money the UK Government does give to each public sector organisation.

The NHS takes up about half of Welsh Government funding, and councils around a quarter.