In a recent address to the Northern Ireland Affairs Committee, the finance minister has expressed significant concerns regarding the upcoming increase in employers' National Insurance contributions, set to take effect in April. The anticipated rise is projected to impose an additional financial burden of £200 million on government departments and their agencies for the 2025/2026 fiscal year. This substantial increase, which does not include healthcare providers or local councils, has raised questions about the Northern Ireland Executive's capacity to manage these new expenses. The finance minister has emphasized the need for clear funding solutions to address this challenge.

The forthcoming adjustment will see employers contributing at a rate of 15% on salaries exceeding £5,000, compared to the current rate of 13.8% on earnings above £9,100. This change is part of a broader initiative expected to generate £20 billion annually, marking one of the most significant tax measures in recent history. Despite assurances from the Chancellor that support will be provided to public sector employers, the finance minister warns that the assistance may fall short by approximately £100 million. In response, she has initiated correspondence with the Treasury, urging for immediate clarification on the extent of financial aid and advocating for full coverage of these costs.

To further evaluate the situation, Professor Gerry Holtham, who previously chaired the Holtham Commission in Wales, has agreed to conduct a review of the necessary funding levels for Northern Ireland. This assessment is scheduled to be completed in time for consideration during the next Spending Review for 2026/2027. The finance minister's actions highlight the urgency of addressing this impending financial strain on public sector employers.

The finance minister's appeal underscores the critical importance of securing adequate resources to mitigate the impact of the National Insurance contribution increase. With the potential shortfall looming, it is imperative that the Treasury provides transparent and comprehensive support to ensure the stability and sustainability of public services in Northern Ireland. The outcome of Professor Holtham's review will play a pivotal role in shaping future financial strategies and policy decisions.