Major government contractors are increasingly pressuring the Treasury to absorb increased costs from rising national insurance and wage bills, sparking taxpayer concern over future financial burdens.
As employers' national insurance contributions rise from 13.8% to 15% and the national living wage rises from £11.44 to £12.21, contractors like Churchill Group and Mitie are shifting these costs directly onto government contracts through renegotiation.
Churchill Group has committed to raising rates in order to cover the increases in wage and national insurance costs, while Mitie anticipates that it will recover around 60% of an estimated £35 million increase in costs through established contract clauses.
The Treasury's own analysis predicts that the changes to national insurance will inflate operating costs for major retailers, such as Tesco and Amazon, by billions, potentially leading to job cuts in the private sector.
#government-contractors #national-insurance #wage-increases #public-sector-outsourcing #taxpayer-impact
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