Action urged with changes to employer NICs set to cost charity sector additional £1.4bn
Melanie May | 1 November 2024 | News
NCVO and ACEVO are calling for urgent action by the Treasury to avoid additional financial burden on sector after the Chancellor announced plans to increase employer National Insurance Contributions (NICs) in this week’s budget.
The National Council for Voluntary Organisations (NCVO) estimates that the measure will cost the charity sector, which employs almost a million people, an additional £1.4bn per year, and impact charities of all sizes.
NCVO and the Association of Chief Executives of Voluntary Organisations (ACEVO) have written an open letter to the Chancellor to outline the potential impacts, and the risk that not addressing this could include.
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Sarah Elliott, CEO of NCVO said:
“Since the budget on Wednesday, we have received countless messages from worried charity leaders. This is the biggest shock to the sector since the pandemic. Changes of this magnitude to employer national insurance contributions will have massive consequences. Our data shows that the changes will create an additional strain on the sector of £1.4bn. Charities across the country are already in a dire situation, juggling a triple threat of rising demand, escalating costs, falling funding. This additional cost, for which there is no headroom in budgets to cover, will be devastating. Addressing these concerns is vital to ensuring charities can continue deliver vital services to the people and communities that rely on them.”
Jane Ide OBE, CEO of ACEVO said:
“We are hearing from our members that the effect of the employer national insurance contribution increases, combined with the continuing financial pressures experienced by many civil society organisations, are causing great concern for sector leaders who have limited choices in how to ensure their operations adapt to absorb the impact. We trust that the recent words from the Prime Minister and Secretary of State emphasising their belief in the value of a strong civil society will mean that the doors are open to meaningful discussion of these issues.”
Charities and voluntary organisations are invited to co-sign the letter, which is available on NCVO’s website.
More on the budget: Sector responds to first Labour budget for 14 years 30 October
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About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.