North Northamptonshire Council says it doesn't know what the full impact of National Insurance rise on social care will be

The Government announced in October 2024 that employer NI contributions would increase from 13.8 to 15 per cent in April 2025.

It also reduced the earnings threshold and will require employers to pay a higher rate of contributions on annual wages of more than £5,000.

Despite campaigning against the move, social care providers won’t be safeguarded and will be subject to the increase.

North Northants Council (NNC) has invested an extra £4,095,754 into the fees paid to adult social care providers this year to meet inflationary pressures as well as paying the increased National Living Wage (£12.21 per hour).

However, it has said it is not able to cover the cost of care providers’ increased NI contributions.

Speaking at an executive meeting last week, Cllr Gill Mercer, lead for adults, health and well-being, said: “We don’t have a bottomless pit of money.

"We cannot also subsidise the national insurance increase so unfortunately that will fall on our suppliers and we don’t know yet what the impact of that will be.

"We just do the best we can by giving this uplift to cover other inflationary pressures.”

The council has laid out a number of inflationary pay increases across its care providers, including a 17 per cent rise in the pay rate for older persons’ nursing care to incentivise providers to join its framework.

According to the authority, the care and support market in North Northamptonshire continues to experience difficulties with the recruitment and retention of care staff.

There is a vacancy rate of 6.8 per cent and turnover rate of 23.4 per cent for care providers.

NNC says it hopes that by effectively managing inflationary uplifts in the social care sector it will support contracted care providers to offer attractive rates of pay and tackle workforce challenges.

Leader of NNC, Jason Smithers, added at the meeting: “It’s just unfortunate that we’re in a position, not just here in North Northamptonshire but across the country, where the Labour government’s policies have amounted to not much more than a raid on employees and employers with their increased NI and lowering thresholds.

“I’m glad that here in North Northamptonshire we’re addressing it in the best way we can and I think we certainly need to keep that pressure on our local MPs and government to look to help local authorities in this sector to ensure that we can continue to invest and protect those who absolutely need our service.”

As NNC cannot offer targeted financial support, the 1.2 per cent rise for employers will require providers to review their business models to enable them to bear the additional NI contributions.

NNC has said it will continue to engage closely with providers to monitor the impact of the additional ‘burden’ of the costs.

It added that it hopes that the sector pay uplifts will ‘alleviate some of these risks and create an environment for greater stability’.