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The £1bn cost of the National Insurance raid that Reeves ignored
The £1bn cost of the National Insurance raid that Reeves ignored

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time5 days ago

  • Business
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The £1bn cost of the National Insurance raid that Reeves ignored

Rachel Reeves's National Insurance tax grab has left councils facing a seven-figure shortfall with more at risk of bankruptcy, MPs have warned. The Chancellor raised employer contributions to 15pc during her Budget, but a Public Accounts Committee (PAC) report on Wednesday said ministers had failed to properly assess another £1.1bn of potential costs. MPs said the Government had not carried out an assessment of the true costs, and demanded it review the short- and long-term impact on providing services. Councils are now facing the risk of private providers passing on their increased costs and handing back social care contracts they can no longer afford to deliver, it said. The report added that local government finance was in a 'perilous state', with budget deficits putting many councils at risk of effectively going bankrupt. The Local Government Association (LGA), which represents councils, has already warned that more than half of councils are on course for insolvency next year. The National Insurance contribution rate for employers rose from 13.8pc to 15pc in April following changes in October's Budget. The salary threshold also dropped from £9,100 to £5,000, as the Government tried to raise tax for public spending. Ministers set aside £4.7bn to support the public sector, including £502m for councils to cover increases in their direct employment costs. However, the LGA calculated the actual cost to be £637m. It also warned of £1.1bn in extra costs for councils passed on by service providers they had commissioned. The PAC report said: 'Some local authorities may be able to provide financial support to service providers for these increases in costs, but it is unacceptable that the Ministry of Housing, Communities and Local Government and HM Treasury have not assessed how much impact this could have on local authorities.' It added: 'Spending on special educational needs and disabilities (Send) has outstripped the money available from the Department for Education to pay for it. Local authority deficits from these overspends are expected to be between £2.9bn and £3.9bn a year by the end of 2027–28. 'The mechanism which allows local authorities to keep these deficits off their books is due to run out in March 2026, and without it, many local authorities are at risk of effectively going bankrupt.' The charity, Mencap, which supports more than 4,000 people with learning difficulties, also told the committee it could be forced to hand back social care contracts after a potential £18m annual increase in costs due to National Insurance and national living wage rises. It comes as council tax is expected to rise again to fund major commitments announced earlier this month in Ms Reeves's first spending review. Rates are already at record levels, with nine in 10 areas across England enduring the maximum 4.99pc council tax rise this year, and parts of Scotland and Wales slapped with even higher increases. A spokesman for the County Councils Network, which represents local authorities, said the Government's compensation covered less than half of the increased costs in National Insurance. He said: 'This year, county and unitary councils are having to make an unprecedented £1.2bn in savings due to rising demand for services, compounded by recent government decisions. One of those was the decision to raise employers' National Insurance contributions, which has adversely impacted on councils. 'Our recent survey found that the Government's compensation covered just 40pc of the costs of this policy for county and unitary councils this year, meaning they will have to make up the shortfall through service reductions and other efficiencies.' Councillor Louise Gittins, chairman of the LGA, said the spending review had left councils under continued financial pressure. She said: 'Many will continue to have to increase council tax bills to try and protect services, but still need to make further cutbacks. While the Government faced tough choices, future funding for adult social care is good news but a lack of significant extra government money needed to meet immediate pressures is worrying.' Jim McMahon, of the Ministry of Housing, said the PAC's claims were not supported by the evidence. He said: 'The spending review provided over £5bn of new grant funding for local services, and that's on top of the £69bn we have already injected this year to boost council finances. 'The results speak for themselves. Over 95pc of audited accounts were submitted for the deadline we set, no S114 were issued by councils as a result of financial distress, and claims against Exceptional Financial Support were £1bn less than the previous year.' Sign in to access your portfolio

'Thousands of children' in Manchester will benefit from major free school meal change
'Thousands of children' in Manchester will benefit from major free school meal change

Yahoo

time05-06-2025

  • General
  • Yahoo

'Thousands of children' in Manchester will benefit from major free school meal change

'Thousands of children' in Manchester are set to benefit from a major change to free school meals from next year. The move, which extends the lifeline benefit to all kids in families who receive Universal Credit, could save parents up to £500 a year. More than half a million children across the country are expected to become eligible for free school meals as a result of the change. Welcoming the news, Manchester council leader Bev Craig said 'thousands of children' across the city will benefit. READ MORE: LIVE: Rail chaos after two people die on tracks with lines shut and emergency measures on major route - updates READ MORE: She was an NHS 'doctor' who earned over £1m helping hundreds of patients... she was lying the whole time Currently, all children in England can get free school meals until the end of Year 2. After that they only qualify if their family gets certain benefits. Kids in families that claim Universal Credit only qualify if their household earns less than £7,400-a-year after benefits. But from September 2026, all children in Universal Credit households will be able to get a free, nutritious hot meal. More than 500,000 kids are expected to benefit from the change which the government says will lift 100,000 children out of poverty. This will benefit thousands of children in Manchester — Bev Craig (@bevcraig) June 4, 2025 Some 2.1m pupils - almost one in four (24.6 per cent) - in England were eligible for free school meals in January 2024. The numbers have soared since the start of the Covid pandemic when 1.44m children were eligible, the Mirror reports. As of this January, nearly half of pupils in Manchester were eligible for the free school meals - around 44,465 in total, according to PA. This is the highest proportion in any local authority area across the country with Salford also ranking high on the list at 36.3 per cent. In Tameside, around 35.1 per cent of pupils currently receive free school meals, while in Oldham the rate is 34.3 per cent. Around 32.9 per cent of kids in Rochdale receive free school meals, while in Wigan 28.9 per cent of pupils are eligible. Bolton appears lower down on the list with 28.4 per cent of pupils currently being eligible while in Bury it's 24.8 per cent. In Stockport 21.6 per cent of pupils are eligible for free school meals while in Trafford, just 17.3 per cent of pupils are. Responding to the announcement, Oldham council leader Arooj Shah, who chairs the Children and Young People Board at the Local Government Association (LGA) said it would have a 'positive impact', but more needs to be done so eligible children are signed up. She said: 'No child should go hungry and expanding free school meals to all those in receipt of Universal Credit has been a longstanding ask of the LGA and councils. 'This move will certainly have a positive impact. Making it easier for more children to have a healthy, nutritious meal will make a real difference to their health, wellbeing and attainment. 'Council still face data sharing and resource challenges in ensuring as many eligible children as possible receive what they are entitled to. 'Introducing automatic enrolment, using existing government data to capture all those who are entitled to free school meals, would also streamline the process and ensure as many children as possible can benefit, at a time when many families are still under financial pressure.' Joseph Rowntree Foundation Chief Executive Paul Kissack said: "It's really positive to see the Government now taking concrete measures to reduce the unacceptable levels of child poverty in the UK. With 4.5 million children currently in poverty, expanding free school meals eligibility is a critical first step to relieve some pressure on family budgets ahead of the Child Poverty Strategy. "We look forward to seeing a coordinated strategy which builds on this, with ambitious measures to boost household income and ensure all children get the best start in life, unhindered by hunger or hardship."

Council ‘staffing crisis' threatens Rayner's housing target , builders warn
Council ‘staffing crisis' threatens Rayner's housing target , builders warn

Yahoo

time03-06-2025

  • Business
  • Yahoo

Council ‘staffing crisis' threatens Rayner's housing target , builders warn

Council staff shortages are causing 'serious' delays and putting Angela Rayner's housebuilding target in jeopardy, builders have warned. The Home Builders Federation (HBF) said a 'staffing crisis' at local authorities had led to mounting delays that are holding up projects across the country. As part of the housebuilding process, developers and local authorities must negotiate agreements on funding for public infrastructure such as schools, roads or affordable homes. However, the time it takes to strike these deals has surged and agreements are now taking well over a year on average to finalise, according to the HBF. Builders have been waiting for an average of 515 days – nearly a year and a half – for these so-called Section 106 agreements to be finalised. That waiting time has increased by a fifth over the past two years. Researchers found 35pc of all Section 106 agreements took longer than a year to complete. In one case, a developer was left waiting for seven years. The Housing Secretary has pledged to build 1.5m homes by the end of the current parliament, although she has conceded in recent weeks that this was a 'stretching' target. The Government has proposed recruiting 300 extra planning officers to tackle the issue. However, the HBF said that this would be nowhere near enough extra staff to address backlogs and delays. The organisation has identified a national shortage of 2,200 planning officers across England and Wales. Neil Jefferson, the chief executive of the HBF, said ministers had taken 'welcomed steps' to address planning delays, but needed to take 'meaningful action' by increasing funding for councils. He said: 'Meeting the Government's ambitious housing targets will require ministers to remove the barriers that are currently causing housing supply to flatline. 'The Government needs to ensure that local authorities have the capacity to process planning applications within a reasonable timeframe such that construction can get under way. 'If ministers can speed up the planning process, alongside providing mortgage support for first-time home buyers, and funding for housing associations to purchase affordable homes, house builders can start to actually increase supply.' Council planning offices are under-staffed as local authorities come under intense financial pressure. Research by the Local Government Association (LGA) in March found that councils face a funding shortfall of more than £8bn by 2028-29 without enough additional income. A quarter of councils in England have warned that they will need emergency bailouts from the Government. An LGA spokesman said: 'There is a significant ongoing and historic challenge with resourcing planning teams and retaining staff with necessary specific skills across the country, with nearly two thirds of councils relying on agency staff to address capacity and skills gaps. 'Planning is a vital part of ensuring safe, well designed and appropriate house building takes place, and despite the challenges faced by local planning departments, nine in 10 planning applications are approved. 'Councils want to work with the Government to better help recruit and retain the planners and built environment professionals required to support an efficient locally-led planning system in order to build the homes we need.' The Ministry of Housing, Communities and Local Government has been contacted for comment. Sign in to access your portfolio

These Are the Best Cities To Fly From To Save Money Going Almost Anywhere
These Are the Best Cities To Fly From To Save Money Going Almost Anywhere

Yahoo

time02-06-2025

  • Business
  • Yahoo

These Are the Best Cities To Fly From To Save Money Going Almost Anywhere

Are you trying to find cheap flights to save money? Whether you are heading to the Caribbean or a domestic location, you'll find many different fares and flight options. Read Next: Explore More: Here are some of the best cities to fly from to save money going almost anywhere, according to a travel expert. So what are the best cities to fly from to save money? GOBankingRates spoke with Katy Nastro, a spokesperson for the Going app. 'The most airports that we often find deals to [are] LGA, FLL, EWR, MIA, JFK, LAX, SNA, ORD and BOS,' Nastro said. In other words, the airports are LaGuardia Airport, Fort Lauderdale-Hollywood International, Newark Liberty International Airport, Miami International Airport, John F. Kennedy International Airport, Los Angeles International Airport, John Wayne Airport, Chicago O'Hare International Airport and Boston Logan International Airport. 'There is no surprise here that these are all based in major metro areas that either have competition from other airports in the area and have a wide variety of both domestic and international carriers for travelers to choose from,' Nastro said. For example, at the John F. Kennedy airport, there are more than 70 different airlines. This means the likelihood of multiple carriers flying the same route is high. To gain your business, airlines may lower their fare price. Check Out: By default, most people search for flights from their closest airport. However, repositioning a flight can result in significant cost savings, especially during peak travel seasons, like spring break or over the holidays. Flight repositioning involves using multiple stops to get to the same destination. Nastro described the best way to reposition your flights, saying, 'Typically, we would suggest finding a quick budget flight to reposition yourself 1-2 hours away to another airport to then fly from there. Alternatively, I've even used miles to reposition myself to LA, for example, from NYC. Fares to Asia at the time I was traveling were 40% less expensive from LA. So, to take advantage of that savings, I booked a separate round-trip flight from New York City to LA to reposition myself at no additional cost (minus the taxes).' When looking for cheap flights, you could consider choosing a city that has high competition. This means there are dozens of airlines and route options for you to choose from. Similarly, consider repositioning your flights. You might be surprised to find that booking two flights can save you hundreds of dollars compared with one direct flight. More From GOBankingRates 9 Downsizing Tips for the Middle Class To Save on Monthly Expenses This article originally appeared on These Are the Best Cities To Fly From To Save Money Going Almost Anywhere

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