Taxpayers facing massive 'rates timebomb' next year as Northern Ireland's 11 councils set to pass National Insurance spike onto public - and Westminster help might not get handed out

That’s the warning from one politician, who says that his council district is staring down a £1.2m bill due to National Insurance rises introduced by Chancellor Rachel Reeves in October’s budget.

Alderman Philip Smith, leader of the UUP group on Ards and North Down Council, warns that rates hikes will be inevitable at all 11 of the province’s local authorities.

And while the chancellor has promised that councils in England will get some help to mitigate the National Insurance increases, which should also come in over here due to Westminster funding arrangements, so far Stormont hasn’t confirmed whether or not any money will actually be handed out to local authorities or just kept in central cash pots.

A spokesman said that Sinn Fein Finance Minister Caoimhe Archibald is “pressing the Treasury to provide adequate funding”, but didn’t commit to handing out extra cash and blamed the British government for any “pressures as a result of this policy decision”.

In her recent budget, the chancellor increased the share of National Insurance that employers have to pay, while substantially lowering the salary threshold at which it kicks in.

The change takes effect in April 2025, meaning councils are currently trying to factor increased costs into next year’s rates bills.

According to Philip Smith, his own district could be forced to hike property taxes by around 2%, unless there’s some help from central government.

Even if Westminster does send over cash to help with salary costs, Mr Smith fears it won’t be ring-fenced, leaving it up to the Northern Ireland Executive whether or not to hand the money to councils or keep it for itself.

Trade leaders last month accused the Executive of holding onto £58m from Westminster meant to help with business rates, putting it instead into a central pot – and next year Stormont will be facing its own increased National Insurance bill, straining already tight budgets.

Said Mr Smith: "Local councils are facing a National Insurance timebomb, unless the Executive steps in to guarantee funding – otherwise ratepayers will end up paying the bill.

“I urge Caoimhe Archibald and the Executive to make the commitment now, that any funding received from the Treasury to cover additional National Insurance contributions will be passed on to councils.

“This is an issue for the entire public sector in Northern Ireland. Every department and unit faces similar increases.

"At the very least, the Chancellor needs to compensate public sector employers and the Executive here must pass on any support to the organisations impacted."

A Department of Finance spokesman stated that officials don’t yet know exactly how much money will come over from Westminster, but predicted that it probably won’t be enough to cover National Insurance rises.

“The Executive does not have the financial capacity to compensate for decisions made on reserved taxation matters,” added the spokesman, though the department didn’t address Mr Smith’s call to commit to distributing all cash designed to mitigate effects on council rates bills.