Concern is growing that local authorities, including Monmouthshire County Council, will struggle to plug the shortfall in employer National Insurance contributions.

Chancellor of the Exchequer, Rachel Reeves, made the decision to increase National Insurance contributions by employers at the budget last autumn. But it has since transpired that the full amount of funding required to meet the requirement to meet the shortfall has not been passed on to local authorities.

In November, Welsh Government Finance Secretary, Mark Drakeford, gave assurances to public sector organisations that they would receive additional funding to cover the higher costs of employing people in Wales.

He said, “the treasury has said today that there will be additional funding for public sector workers to cover the costs of employer national insurance contributions.”

“It will provide full funding to deal with the national insurance contributions of employers in those circumstances.”

However, to the surprise of public sector employers in Wales, it was revealed that the UK Government has not passed on the full level of funding for public sector organisations in Wales. It means there is a £72 million shortfall across Welsh public services.

The MS for Monmouth, Peter Fox, expressed his fear that Monmouthshire Council will be forced to make further cuts to its own services and the former leader of the council blames Labour for the conundrum.

“Mark Drakeford assured us that these tax increases would not fall on the public sector, so last week’s news was bitterly disappointing,” he said.

“Local authorities will now face a difficult choice: either cut vital services or raise council tax to cover the extra costs.”

“I’ve written to the Leader of the Council to ask what effect this funding gap will have on the council’s ability to maintain essential services such as social care, bin collections, and road maintenance.”

“My fear is that, without this support, Monmouthshire Council will be forced to make further cuts. This situation has arisen entirely because of Labour’s Jobs Tax and a Treasury decision that once again shortchanges Wales.”