SNP, Lib Dem Fife councillors unite to demand ‘fair funding’ to cover National insurance hike

The parties united to order Fife Council Labour leader David Ross to write to Westminster to request full funding for the rises for every local authority in Scotland , including Fife,– and for all other bodies providing public services such as GPs, dentists, and the social care sector.

The UK Government announced in October that the rate of Employers National Insurance would be increased from April 2025 from 13.8% to 15.0% and that the threshold above which contributions will be paid has reduced from £9,100 to £5,000.

Scotland is due to receive additional funds for those changes, but Fife SNP group leader Craig Walker said the increase is unlikely to be fully covered.

He said: “It’s clear that if the Chancellor does not fully reimburse these costs, then there will be a detrimental impact on services the public rely on.”

The Lib-Dem amendment went even further. It asked the UK Government to cover the “significant costs” of the increase for “bodies providing public services in Scotland” – including GPs, dentists, and the social care sector.

“Fundamentally, there are other bodies providing a service to the public who are going to be impacted by this,” Lib-Dem group leader James Calder said.

“The issue is that a lot of these bodies are not going to receive the funding back for this.”

Cllr Calder quoted the Institute of GP Management as saying the National Insurance increases would cause the average GP surgery tax bill to surge by approximately £20,000 per year.

“I really hope that any funding settlement takes into account the impact on all these bodies providing public services,” he said.

The Labour amendment was similar in substance, but not in tone. It also laid the responsibility of mitigating national insurance increases at the feet of Holyrood.

Labour’s proposal noted the “possible impacts” of the increases on the council and its partners and it would have seen the council leader writing to both UK and Scottish Governments requesting an agreement on “how these increased costs will be met with no detriment to the council”.

The SNP and Labour groups could not overcome their differences, and the two proposals were put to a vote.

Lib-Dems broke ranks with Labour and voted alongside SNP councillors to defeat the amendment 42-26.

The council leader will now write to the UK Government to request it “fully reimburse the over £500m costs of employer National Insurance contributions to the public and third sectors in Scotland”.

The motion also recognised that if the Chancellor “does not fully reimburse these costs, they will have a detrimental impact on the services the people of Scotland rely on, including here in Fife”.