COUNCIL tax bills could soar because of the Government’s manifesto-busting National Insurance hike to fund social care, Whitehall chiefs admitted last night. Mandarins said Government departments will get a whopping £2billion to cover the cost of the tax rise for “directly employed” staff like teachers. But councils that outsource a lot of services and staff […]
COUNCIL tax bills could soar because of the Government’s manifesto-busting National Insurance hike to fund social care, Whitehall chiefs admitted last night.
Mandarins said Government departments will get a whopping £2billion to cover the cost of the tax rise for “directly employed” staff like teachers.
But councils that outsource a lot of services and staff — such as binmen and traffic wardens — could be left with a massive bill for National Insurance contributions (NIC).
Cash-strapped councils are likely to whack up council tax to cover the cost, civil servant chiefs warned.
Cat Little, who oversees public spending at the Treasury, told the Public Accounts Committee of MPs she “cannot commit” to compensation for outsourced workers.
Tory MP Geoffrey Clifton-Brown warned this was likely to mean higher council tax bills next year.
He said: “A waste collection company providing 100 per cent of their service to the local authority — will they or will they not have all their NICs reimbursed?
“If they don’t, the cost goes up for local authorities and it will then have to go on to council tax payers.”
Ms Little said the Treasury will “look at the consequences” of the tax rise for councils before the Budget next month.
But angry MPs said it would be wrong for Brits to be clobbered by a double whammy of higher council tax and National Insurance bills.
Tory NI rebel Marcus Fysh warned it would be “completely unacceptable” for council tax bills to rise.
And he said it was “ridiculous hypocrisy” to force struggling businesses to pay higher NI while Government departments do not fork out a penny extra for their staff.
Senior Tory MP Julian Knight added: “It’s another reason why tax rises are never the way forward.”
Around 40 Tory MPs refused to vote for Boris Johnson’s tax rise in a symbolic vote last week.
But Chancellor Rishi Sunak has held a string of meetings with rebels in a charm offensive — and the bill is set to be rammed through the Commons tonight.
Labour leader Sir Keir Starmer joined the criticism of the tax hike — and suggested the party would raise capital gains tax instead.
He said: “This tax rise is unfair because it hurts working people.”
His deputy Angela Rayner also blasted the move — but refused four times to say how Labour would raise the cash to fix the social care crisis.
In a rambling BBC interview, she simply said those with the “broadest shoulders” should cough up more.
