A hike in national insurance will hit Bristol City Council next month costing millions of pounds. The government is increasing how much employers have to contribute to national insurance, which will add further pressure to already stretched public services.
Last month the council voted through a gigantic budget for the next financial year which begins this April, including a 4.99 per cent increase in council tax. But pressures on the budget continue, as demand for expensive services like social care rises faster than funding from the government.
Also this April, the rate at which employers pay national insurance increases from 13.8 per cent to 15 per cent. This could cost the city council about £6 million a year, not including the impacts on Bristol Waste or the hundreds of contractors which help provide local public services.
Green Councillor Tony Dyer, leader of the council, called on the government for both more money and more flexibility on spending that money, in an interview with the Local Democracy Reporting Service. He repeated warnings that without government action, spiralling costs of support for pupils with special educational needs and disabilities could soon be catastrophic.
Cllr Dyer said: “It’s a huge budget, £1.7 billion for 2025–26 alone. There was an opportunity for members of all parties to contribute to the budget, some more enthusiastically than others. There were a couple of amendments to the budget that went through, which we accepted.
“Now the work shifts because it’s now about delivering that budget, and it’ll be tough to deliver. There’s a lot of investments across the range of what the council does, on housing, children and education, adult social care, public health and transport. There’s a lot of work to do.”
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Since taking over as council leader, Cllr Dyer has been working 12 hours a day on average, from 7am to 7pm, with frequent evening events to attend too. As well as running City Hall, there are still residents in his ward of Southville to represent and help resolve neighbourhood issues. Cllr Barry Parsons, chair of the housing policy committee, also has a young child to look after.
Cllr Parsons said: “I need to be able to make sure I can do the school run and maintain a family life. It’s tricky because there are lots of demands on your time. A lot of the time, people’s expectations are that you’ll be available outside of normal working hours. I do try to keep a decent balance between work and home life.
“It’s important as local politicians that we’re able to do it alongside the demands of home. In order for local politics to be accessible for people, it’s important that we’re able to show you can do it alongside work, family life and other things.”
Cllr Dyer added: “I’m a grandfather and last Saturday was my eldest granddaughter’s seventh birthday party, and I made sure I was available for that. I don’t want to overplay it either — there are plenty of people in the city working really long hours. There are people out there working three jobs just to keep a roof over their heads.
“I don’t want to complain too much. We knew what we were getting ourselves in for, when we put ourselves up for election. We accept that responsibility. It is hard work, but it is hard work for a lot of people in the city.”
One hard part of the job is the increasing pressures on the budget, with rising demands for expensive services, and a lack of government funding to match. Even with a new Labour government, the spending taps have still not been switched on, leaving Bristol and other councils struggling to balance the books.
Bristol was given a seven per cent increase in its core spending power, which is more like five per cent when taking into account inflation. But the cost of providing many council services is increasing at double that rate. Cllr Dyer said: “If your income is increasing at half the rate your expenses are, then your problems just get even worse.”
For the fifth year in a row, council tax bills are going up by 4.99 per cent. The balance of how the council funds its services is switching, becoming more reliant on council tax bills, as the government has gradually withdrawn its funding over the past several years. Other cities have seen much higher council tax hikes, like Birmingham where bills will go up by 7.49 per cent.
Hope could come this summer, when the government reveals its latest spending plans — that could include a much-needed boost for local councils. The comprehensive spending review is scheduled for June, and Cllr Dyer expects “some good stuff, and some stuff that’s not so good”.
Next month the city council will be hit with a tax hike itself, and like many employers will have to start paying increased national insurance rates. The council will have to pay half the cost of the increase, or about an extra £6 million a year, while Bristol Waste will have to pay the entire hike. Local social care companies and housing associations will also be hit by the increases in April.
As well as more funding, Cllr Dyer called on the government to give councils more flexibility in raising and spending money. Political power is very centralised in Britain, whereas most other countries give cities and regions a much greater say in how public services are funded.
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He said: “We get some funding packages which come with strict rules about what they can be spent on. Sometimes it isn’t until you get to the local area that you can actually be able to make the best decisions about how and when that money should be split up.”
More support for early intervention and preventative services would also help, the council leader added. “If we can get in early, it’s better for the individual themselves because it stops the harm happening in the first place, or at least mitigates it. And it also costs less to actually treat it at an earlier stage rather than allowing it to accumulate.”
A glaring financial threat facing Bristol, and many other English councils, is the ballooning costs of providing support for children with special educational needs and disabilities. The National Audit Office has warned of a crisis in how SEND is funded, and the government has given special permission for councils to carry a deficit, however this expires in March next year.
Cllr Dyer said: “At the moment if something isn’t done, ourselves and probably somewhere between a third and two thirds of councils will go bankrupt in the next couple of years. There needs to be a proper solution for that, not one that just kicks the can down the road for another three or four years.
“The reforms in 2014 were absolutely the right reforms to bring in and councils across the country should be providing those higher levels of service. But we need to be funded to do that, because otherwise all you’re doing is squeezing blood out of a stone.”
Despite the widespread pressures, both councillors remained positive while lamenting that “really good stuff happening” tends to get less coverage than the problems facing Bristol. They added that some ongoing work might not show benefits until a few years later.
“There is a tendency to end up having conversations about the more negative things sometimes,” Cllr Dyer said. “But this job is also a massive opportunity to do some good for the city. There’s a lot of really good stuff happening that doesn’t always necessarily get coverage.
“I’m not complaining about working 12 hours a day, because nine times out of 10, I go home happy with something that’s happened. It’s hard, but sometimes that makes it more worthwhile at the end when you can tick and say we’ve done that today.
“Some of the stuff we’re doing at the moment, we probably won’t see the benefits of until three, four, five or six years down the line. But we’ve started stuff off in motion that will pay dividends in the years to come for the people of Bristol.”
“I love this job,” Cllr Parsons added. “I used to work in academia, and that was far more political and Machiavellian than this. It’s an enormous privilege. I live in Easton, the ward that I represent, and I spent years looking around my neighbourhood, talking to my friends, seeing things that annoyed me, things that ought to change. This is an opportunity to make change.”