We drew MHCLG’s attention to the Local Government Association’s calculations on the costs to local government of the increases in NICs. These suggest that the direct cost to local government is an estimated £637 million. The LGA also calculated indirect costs of £1.1 billion to private sector organisations who provide services to local government. When we challenged MHCLG on a potential funding shortfall of more than £1 billion, it again referred to the £5 billion of extra grant funding provided through the local government finance settlement for 2025–26. However, MHCLG had not carried out its own assessment of the LGA’s figures.56 51 LGFS0002 52 LGFS0024 53 Qq 47, 48, 49 54 Q 48 55 Qq 50, 51 56 Qq 75,76, 77; LGA statement on provisional Local Government Finance Settlement, 18 December 2024 17 Managing overspends in local government