Families could be hit with higher council tax bills after hike in NI

FAMILIES could be hit with higher council tax bills because of the national insurance rise to fund the NHS and social care, a Whitehall chief admitted yesterday.

Around £2billion of the £14billion to be raised by the 1.25 percentage point tax rise, aiming to relieve pressure on NHS waiting lists caused by Covid, will be swallowed up by higher public sector wage bills. The Treasury said it would hand government bodies extra money for costs of higher employer national insurance contributions for directly employed staff.

But councils that outsource services could be left with the bill and may pass it on to households by raising council tax. Boris Johnson today will try to ram legislation for the rise through the Commons.

Asked if councils would be reimbursed for contractors’ extra costs, Cat Little, director general for public spending at the Treasury, told the Commons public accounts committee that ‘all direct employees of the public sector will be compensated for’. When asked if councils that might otherwise put up their tax bills would be reimbursed, she said: ‘I cannot confirm the position at this stage.’