Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the additional costs to devolved governments on public sector pay bills as a result of the increase in employer National Insurance contributions.

The UK Government will provide support for departments and other public sector employers for additional employer National Insurance contributions (NICs) costs. This funding will be allocated to UK Government departments, with the Barnett formula applying in the usual way for the devolved governments.

Funding resulting from the employer NICs policy change will be in addition to the devolved governments’ 2025-26 settlements announced at Autumn Budget 2024, which include £47.7 billion for the Scottish Government, £21.0 billion for the Welsh Government, and £18.2 billion for the Northern Ireland Executive. These settlements are the largest in real terms since devolution and ensure that each devolved government receives at least 20% more funding per person than equivalent UK Government spending in other parts of the UK.

Decisions on devolved priorities – including the size and pay levels of the public sector – are a matter for the devolved governments, and it is for them to determine how to allocate their budgets across devolved areas.