On the 30th of October, as part of the UK Government budget, the new Chancellor of the Exchequer announced a substantial increase in the National Insurance Contributions that employers will pay from April 2025.
This decision will significantly impact includem, as well as other essential third sector organisations who deliver public services across Scotland.
We’ve joined with organisations such as SCVO, NCVO and CCPS to call on the Chancellor to exempt third sector organisations.
This week, we received her response.
Here, Martin Dorchester, our Chief Executive writes our response.
I find myself saddened and angered at the Chancellor’s response to over 7000 UK charities and voluntary organisations and our plea for help.
Help at a time when we and the people we support need us more than ever.
As a sector, not the third sector, not the not-for-profit sector, but the essential sector, we provide: help and support to the most challenged and excluded in our society. We provide it 24×7 and as well as enhancing the lives of the people we support we make vast savings by reducing the challenges faced by statutory bodies such as social work, the police, health services and education
To say I’m saddened at the total lack of understanding of our essential sector does not even cover it.
We don’t need a “reset” of our relationship with government, what we need is to be recognised for the amazing, difficult, and sometimes heartbreaking hard work that our sector delivers, time and time again.
To tell us that our sector is valued whilst also hanging us out to dry is one of the saddest comments and reflections on the sector I have ever heard!
At the same time, I am also angry.
Where was the engagement with the sector about this change?
Where is the risk and impact assessment?
Where is the cost-benefit analysis?
Surely, before taking this action there was work done to ask:
“What will happen if we bankrupt the charity sector?”.
Why did it take the sector to highlight to the Treasury that across the UK the cost will exceed £1.4bn to organisations within the sector who are least able to afford it?
Doesn’t the Treasury and the Chancellor realise that £1.4bn is peanuts compared to the cost of those services disappearing and the pressures this would ultimately put on the public purse?
For years organisations within our sector have reinvested profits (when made), used reserves (frequently) to provide our services. We operate on the very front line, day in and day out. Pay and work benefits are not the highest but the impact we have on people, communities and society is immeasurable.
We have done this through the most difficult of times: through austerity cuts, Covid-19, the cost-of-living crisis, fuel crisis. The list goes on, and we have done this while managing shrinking budgets.
I am not clear what “developing a stronger partnership between government and the sector” means anymore, nor how, apart from us saying NO, we answer the Chancellor when she asks us if refusing to help and support the sector is helpful!
The Chancellor comments “recognising the sector as a trusted and independent partner” but I see little evidence of that in the response we received.
Our sector delivers essential services, including statutory services for local authorities, helps to improve people’s wellbeing and contributes to the country’s economic growth. I wonder if the Chancellor can explain therefore why that is not “a public service” and exempt us from the National Insurance increase?
Finally, the Chancellor commented that she looked forward to continuing to work with the sector.
For everyone’s sake, let’s hope there still is a sector to work with.
