Submission Documents: Motion by Councillor Richard Bell:- "Council notes the significant negative impact that the increase in employers' National Insurance Contributions will have on the public and third sectors in the city and calls on the UK Government to rethink this measure, which has the potential to jeopardise the provision of essential services and supports to the people of this city. Council understands that the UK Government expects this to raise money for the economy, however council believes this will be harmful to the public, private and third sectors which provide essential services and supports employment in our city. Council also understands that the majority of businesses expect negative impact from national insurance increase, and this is expected to hit businesses with '£25bn hike. Council is alarmed that a month after Reeves' Budget, the Confederation of British Industry (CBI) now believes expectations for UK growth have turned negative: UK economic growth has slowed to 0.1%, high interest rates take a toll, and the UK's manufacturing sector worsened last month, with activity falling to a nine-month low. CBI's growth indicator shows most UK companies are anticipating a decline in activity over the next three months, that firms are planning to reduce headcount, with hiring intentions at their weakest since the tail end of the Covid-19 pandemic and that this is a particularly bleak prediction, considering private sector activity already fell in the three months leading up to November. Council notes that Cosla has estimated that these changes will cost £265m to Local Government in Scotland, of which Glasgow City Council is the largest local authority with the largest workforce. Council estimates that the cost to GCC will be £30m. Council notes that £4.7billion will be allocated to public sector organisations, however we understand that Scotland will receive a Barnett Consequential allocation of that money which will be much lower due to the significant size differentials between our public sectors. Council agrees that the approximate £300m offer by the UK Treasury to the Scottish Government to cover National Insurance increases is "austerity through the back door" and agree that the Scottish purse would require more than £500m to fully mitigate the increase due to the better paid and better valued workforce in Scotland. Council regrets the introduction of further uncertainty into the public finances at a time of higher inflation and a cost-of-living crisis which has severely affected the public and third sectors as well as residents of this city. Council notes with alarm the Fraser of Allander Institute estimate that the change may cost £931 on average for each public sector worker, after using data from the Annual Survey of Hours and Earnings, which is the most comprehensive data source on earnings, and includes a split between the public and private sector in Scotland. Council further notes the Fraser of Allander Institute estimate the Total Devolved Public Sector costs to be £509m which does not include Arm's Length Organisations (or ALEOs). Council believes that as well as the burden on public finances, the increase will place a huge burden on the third sector, which provides such fantastic and essential services to the people of our city, and which is already coping with increased running costs due to the economic decisions of the last UK Government. SCVO estimate that the national insurance increase will costs the voluntary sector in Scotland around £75m and that given the challenging financial context, any increase in costs will be hard for voluntary organisations to meet. Council agrees with SCVO and the child and social care sector that Reeves reckless National Insurance Contributions increase only increases the risks faced by these sectors and their service users. Council shares the concern of the social housing association movement and other RSLs who have indicated that to meet their increased NIC costs they are faced with either increasing rents, scaling back repairs and maintenance, and limiting their ambitions to provide affordable housing in Glasgow. Council believes the third sector is a vital part of our city and applauds the work of the many organisations like Citizens Advice, and others, who provide lifeline to the people of Glasgow and which are reliant on charitable funding, with no other source of income to meet an increased NIC bill, and deplores a situation where these organisations could be forced into making service or staff cuts which will reduce their ability to assist the community due to the decisions of the UK Government, and which are ultimately to the detriment of the people. Council agrees with COSLA and LGA that "Councils are facing unprecedented financial challenges, with the increases to employer National Insurance Contributions likely to add significant costs for councils and the wider sector. These pressures, compounded by inflation rises, are putting vital services at significant risk of collapse." Council believes the UK Labour Government had a clear opportunity to create a fairer, economy and instead have repackaged failed ideas and policies that do not offer any hope for the urgent economic transformation required and instead have proven to be incompetent bookkeepers instead of changemakers. Council instructs the Chief Executive to write to the Chancellor of the Exchequer to note the above and make clear that the UK Labour budget and the National Insurance hike are calamitous for Councils."
This is the list of documents available for the submission Motion by Councillor Richard Bell:- "Council notes the significant negative impact that the increase in employers' National Insurance Contributions will have on the public and third sectors in the city and calls on the UK Government to rethink this measure, which has the potential to jeopardise the provision of essential services and supports to the people of this city. Council understands that the UK Government expects this to raise money for the economy, however council believes this will be harmful to the public, private and third sectors which provide essential services and supports employment in our city. Council also understands that the majority of businesses expect negative impact from national insurance increase, and this is expected to hit businesses with '£25bn hike. Council is alarmed that a month after Reeves' Budget, the Confederation of British Industry (CBI) now believes expectations for UK growth have turned negative: UK economic growth has slowed to 0.1%, high interest rates take a toll, and the UK's manufacturing sector worsened last month, with activity falling to a nine-month low. CBI's growth indicator shows most UK companies are anticipating a decline in activity over the next three months, that firms are planning to reduce headcount, with hiring intentions at their weakest since the tail end of the Covid-19 pandemic and that this is a particularly bleak prediction, considering private sector activity already fell in the three months leading up to November. Council notes that Cosla has estimated that these changes will cost £265m to Local Government in Scotland, of which Glasgow City Council is the largest local authority with the largest workforce. Council estimates that the cost to GCC will be £30m. Council notes that £4.7billion will be allocated to public sector organisations, however we understand that Scotland will receive a Barnett Consequential allocation of that money which will be much lower due to the significant size differentials between our public sectors. Council agrees that the approximate £300m offer by the UK Treasury to the Scottish Government to cover National Insurance increases is "austerity through the back door" and agree that the Scottish purse would require more than £500m to fully mitigate the increase due to the better paid and better valued workforce in Scotland. Council regrets the introduction of further uncertainty into the public finances at a time of higher inflation and a cost-of-living crisis which has severely affected the public and third sectors as well as residents of this city. Council notes with alarm the Fraser of Allander Institute estimate that the change may cost £931 on average for each public sector worker, after using data from the Annual Survey of Hours and Earnings, which is the most comprehensive data source on earnings, and includes a split between the public and private sector in Scotland. Council further notes the Fraser of Allander Institute estimate the Total Devolved Public Sector costs to be £509m which does not include Arm's Length Organisations (or ALEOs). Council believes that as well as the burden on public finances, the increase will place a huge burden on the third sector, which provides such fantastic and essential services to the people of our city, and which is already coping with increased running costs due to the economic decisions of the last UK Government. SCVO estimate that the national insurance increase will costs the voluntary sector in Scotland around £75m and that given the challenging financial context, any increase in costs will be hard for voluntary organisations to meet. Council agrees with SCVO and the child and social care sector that Reeves reckless National Insurance Contributions increase only increases the risks faced by these sectors and their service users. Council shares the concern of the social housing association movement and other RSLs who have indicated that to meet their increased NIC costs they are faced with either increasing rents, scaling back repairs and maintenance, and limiting their ambitions to provide affordable housing in Glasgow. Council believes the third sector is a vital part of our city and applauds the work of the many organisations like Citizens Advice, and others, who provide lifeline to the people of Glasgow and which are reliant on charitable funding, with no other source of income to meet an increased NIC bill, and deplores a situation where these organisations could be forced into making service or staff cuts which will reduce their ability to assist the community due to the decisions of the UK Government, and which are ultimately to the detriment of the people. Council agrees with COSLA and LGA that "Councils are facing unprecedented financial challenges, with the increases to employer National Insurance Contributions likely to add significant costs for councils and the wider sector. These pressures, compounded by inflation rises, are putting vital services at significant risk of collapse." Council believes the UK Labour Government had a clear opportunity to create a fairer, economy and instead have repackaged failed ideas and policies that do not offer any hope for the urgent economic transformation required and instead have proven to be incompetent bookkeepers instead of changemakers. Council instructs the Chief Executive to write to the Chancellor of the Exchequer to note the above and make clear that the UK Labour budget and the National Insurance hike are calamitous for Councils." .
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Item Minute - 12 December 2024 | Minute | Public |
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