In a parliamentary debate in the House of Commons on Tuesday 7 January, the issue of the impact of change to employers’ National Insurance contributions on the charity sector was raised.
The debate was brought by Joe Robertson, Conservative MP for Isle of Wight East, who has personal experience of the charity sector through his work with Dementia UK as a Legal and Governance Advisor.
Twenty-eight MPs from across the political spectrum spoke on the issue. Many shared stories of charities in their constituencies that will be impacted by the increase in costs brought on by the changes announced in last October’s budget.
Context to the debate
From 6 April 2025, employers’ national insurance contributions (ERNICs) will rise to 15%, with the threshold at which ERNICs would apply was brought down from £9,100 to £5000.
It’s estimated that the increased costs will amount to £1.4bn for the sector as a whole, and CFG’s survey results revealed significant concerns about the impact this will have. Many respondents stated that they were considering handing back local authority contracts, reducing staff numbers and scaling back the services they provide for their beneficiaries.
The debate
Joe Robertson MP opened the debate noting that ‘charities deliver almost £17bn worth of public services a year’, adding that ‘public services…could not operate without charities. Edward Morello, MP for West Dorset, was one among several MPs who talked about the local impact. He stated that Weldmare Hospice care will see an increase in costs of more than £90,000.
It was also highlighted that homelessness charities would lose £60 million as a result of the changes, with Crisis facing an additional £750,000 in costs, potentially leading to reduced frontline services. Joe Robertson MP also stressed that women’s support charities such as Women’s Aid and Rape Crisis had warned of potential staff cuts and service closures, impacting a key government mission.
Stephanie Peacock MP, Parliamentary Under-Secretary of State for Culture, Media and Sport, stated that she will reflect the points made in the Commons back to the Treasury. She stated she is “committed to continuing that engagement with charities and voluntary groups up and down the country” and concluded by thanking charities and volunteers for their work.
Supporting the sector
Since the autumn budget, CFG has been working alongside other organisations to communicate with the government in advance of the next fiscal event in the spring.
It is positive to see that the concerns of charities have now been raised in parliament, and that the impact of the ERNICs rise on charities is now garnering national attention.
CFG will continue to advocate on behalf of all our members and the charity sector as a whole, and via our submission in advance of the multi-year Spending Review later in the Spring.