Budget plan to hike employer NI contributions could cost Scottish NHS 2,000 nurses, Labour warned

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The Chancellor's plan to hike employer National Insurance contributions could cost the NHS in Scotland 2,000 nurses, the Scottish Government has warned. Rachel Reeves is expected to announce the move – to raise an extra £20billion – in her Budget on Wednesday.

But SNP Finance Secretary Shona Robison is demanding Labour fully offsets the extra cost to public sector employers in Scotland, where the NHS could be left with an extra £140million annual bill.

She told the Sunday Mail: “After 14 years of austerity, we want to see a UK Budget that looks to the future and invests for growth and prosperity. One change reported in the media is a possible increase in employers’ NI contributions.

“While the Chancellor seems to favour this move to help put public finances on a sustainable footing, there is a real risk that it could have the opposite effect in Scotland.

“The NHS in Scotland alone would face an estimated additional cost of £140million from a two percentage point increase in the employer contribution rate. That would be equivalent to well over 2000 qualified nurses.

“Unless the cost of increased NI contributions for public sector workers is fully funded – to cover every extra penny of tax for every public sector employee – the cash for this would have to come from existing budgets. This would put frontline services at risk, both those delivered by the Scottish Government and those delivered by our partners in the third sector.”

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The Chancellor is expected to increase the NI rate for employers to boost funding for public services, including the NHS. Reeves is also expected to lower the threshold for when employers start paying the tax – with the two measures combined to raise about £20billion.

The move is thought to be the single biggest revenue raiser of next week’s Budget, with the NHS the expected recipient of much of the extra cash raised mainly from private sector employers. However, Robison’s fear is that Scotland’s higher percentage of public sector workers – on higher pay than England – will leave the country short-changed.

She added: “If we were only to get a Barnett share of the supposed ‘reimbursement’ of staff in England, that could leave Scotland’s NHS facing a significant loss. Scotland and the other devolved nations must not be short-changed.”

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