‘No more excuses’ as UK Treasury to hand Scottish Government £300m to cover National Insurance hike

At the UK Treasury’s decision to allocate around £300 million to cover the National Insurance hike on employers, the Scottish Government is set to benefit from this financial boost. The funding, to be provided by the end of the financial year, is aimed at covering the increased NI costs for public sector employers in Scotland. This funding injection comes as a timely support for SNP ministers, just ahead of the upcoming Scottish Budget statement scheduled for December 4.

A source from the UK Government emphasised that there should be “no more excuses” from the SNP ministers after this funding award, highlighting that Holyrood is expected to receive over £5 billion as a result of the UK budget. The source stressed the importance of using this additional funding to address pressing issues such as reducing NHS waiting times and enhancing educational outcomes, rather than plugging budget deficits arising from financial mismanagement.

Chancellor Rachel Reeves had previously outlined plans for Scotland to receive an extra £3.4 billion in funding for the fiscal year 2025-26. In addition to this, the UK Government is now providing supplementary funds to compensate for the increased staff costs resulting from the rise in NI contributions. The Scottish government is also slated to get an extra £1.5 billion for the current fiscal year, aligning with its initial budget projections.

With National Insurance contributions being a significant revenue stream for the UK, concerns have been raised at Holyrood regarding the need for proportional compensation for the public sector in Scotland. Given that approximately 600,000 people are employed in Scotland’s public sector, amounting to 22% of the total workforce, there is a call for fair treatment to ensure Scotland is not disadvantaged by the compensation scheme for the NI increase.

Amid ongoing discussions with the Treasury, a Scottish Government spokesman pointed out the potential negative impacts of the UK government’s policy on economic growth and public services. The lack of certainty ahead of the Scottish budget has also been highlighted as an area of concern. As negotiations continue, there is a sense of anticipation and importance placed on how these additional funds will be utilised to address key areas of need in Scotland.