This week’s budget announcement saw the government commit to investment in public services and to put stability at the heart of its programme of national renewal. After more than a decade of the harshest operating environment, including austerity, investment is long overdue and much needed.
Across the UK, charities have responded to a significant increase in demand for charity services. Since the pandemic and cost of living crisis, they have pulled on all the levers available to them to keep their doors open for the people and communities they exist to serve.
Following the Chancellor’s announcements on Wednesday, a significant number of CFG members have contacted us to share their concerns about the rise in Employer National Insurance Contributions (ERNICs).
Initial figures by the National Council for Voluntary Organisations (NCVO) and the Association of Chief Executives of Voluntary Organisations (ACEVO) estimate that the increase could cost charitable organisations around £1.4bn.
We share the concerns of our charity members and sector partners and have signed a joint letter to the Chancellor. In just over 24 hours, more than 2,300 organisations had signed the letter.
Charities from across the UK are telling us that the increase will have a significant and negative impact on their operations and their ability to deliver services, which are already under enormous pressure.
Share your views
On Wednesday, we launched a survey to better understand the impact that the increases to the National Living Wage and ERNICs will have on our sector.
If you are a charity and have not done so already, please complete the survey.
From the analysis of the information we have received so far, we are worried that charities are now having to pivot quickly to mitigate the impact of the increase in ERNICs.
- 61% of respondents said they are very concerned about the rise in the rate of ERNICs. 20% told us they are moderately concerned.
- 50% said they were concerned ‘a great deal’ about their organisation’s ability to absorb the additional costs under their current operating and financial models. 20% said they are concerned 'a lot'.
- 43% said it is very likely that the changes will result in the cancellation of plans to deliver new services or hire new staff. 25% said it was likely to lead to plans being paused.
- 38% said that the changes are very likely to results in staff reductions, through redundancies, not backfilling roles or by not renewing fixed-term contracts. 23% said it was likely they would have to consider these options.
The Labour Government has stated that it recognises the important role that charities play within our society. This was reiterated by the Prime Minister, Sir Keir Starmer, and Secretary of State for Culture, Media and Sports, Lisa Nandy, during the sector’s meeting with them in October. Their commitment appears genuine and the new tone very welcome.
We believe the consequences of the increase in ERNICs are unintended and, on Tuesday, we will be meeting with Ministers, alongside our sector partners, to highlight the concerns of many of our members and to discuss how difficult choices that have had to be made inadvertently undermine the sector’s ability to serve.
CFG CEO Caron Bradshaw comments: “We understand that the recent budget announcement has caused much concern among our members. We want to reassure you that we are actively listening to your feedback and working hard to advocate for the sector.
“We know that our members will remain focused on their vital work and will continue to endeavour to provide services to the communities they serve.
“As always, CFG is here to support its members and the wider sector and the team will be providing regular updates and guidance. Please do complete our survey. This gives us vital information that we can share with government.
“If you want to reach out to our team with any questions or thoughts, please do.”
Email the team
Media contacts:
If you are a member of media and require any information, please email Emma and Clare:
Emma Abbott, Communications Manager:
Clare Mills, Deputy CEO/Director of Policy and Communications
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