We’re working together with partners and voluntary organisations to address the impact of Employer National Insurance changes in Wales and the UK.
The new UK Government started making its mark with an Autumn Budget significantly different from the ones we have seen in the past few years.
While we welcome a record-breaking financial settlement for Wales and promises of closer collaboration with Welsh Government, the budget also introduced significant challenges for the voluntary sector. WCVA is working with partners to influence decision-makers and reduce the impact.
THE EXPECTED IMPACT
As is always the case, the UK budget will have wide-ranging impacts, some of which will not come to light until after Welsh Government and Local Authorities have drafted their budgets. We have identified two immediate areas of concern for the voluntary sector – the rise in Employer National Insurance Contributions (NICs), and the new National Living Wage.
These increases place additional financial strain on organisations already navigating soaring running costs, growing demand for services, and limited funding opportunities. In practice, this means the ability of voluntary organisations to deliver vital services and retain staff is eroded, particularly in an already tight labour market.
Charity Finance Group have published a more in-depth summary of the budget implications for charities. Wales Governance Centre have published a blog explaining the broad impact in Wales.
WCVA’S RESPONSE AT UK LEVEL
We joined forces with leading sector organisations across the UK calling on the Chancellor of the Exchequer to reimburse voluntary organisations’ increased Employer NICs in line with the reimbursement promised to public sector employers. Unfortunately, the Chancellor recently wrote back to us declining the request. We are working with partners to plan our next steps.
Looking ahead, we want to ensure UK Government’s Spending Review delivers fair, multi-year funding for devolved governments and instils an approach to UK fiscal policy that considers devolution. Together we are making these asks in a letter to the Chancellor from the Civil Society Group.
SPEAKING FOR THE SECTOR IN WALES
Your timely reaction and case study submissions enabled us to act quickly and write to the Cabinet Secretary for Finance and Welsh Language with asks for contract uplifts and mitigation in Welsh Government’s draft budget.
Our open letter gained national TV, radio, print and online media coverage. Key opposition political figures have since joined the conversation, demonstrating cross-party awareness and support for the voluntary sector.
The impact of employer NICs rises for charities in Wales was repeatedly raised in plenary through questions to the First Minister, the Cabinet Secretary for Finance and Welsh Language and the Cabinet Secretary for Social Justice.
Plaid Cymru led a Senedd debate on the impact of the rise in employer NICs and tabled a motion echoing our ask of UK Treasury to reimburse voluntary organisations, making a strong argument through voluntary sector case studies.
We were disappointed to see the motion voted down in the Senedd and replaced with a Welsh Labour-backed motion that makes no reference to the voluntary sector. This debate attracted further media attention.
NEXT STEPS
Our priority is maintaining the momentum of this campaign until we secure tangible commitments to appropriate support for the sector from all levels of government. We will continue to work closely with voluntary organisations and partners to ensure that their voices are heard, both in Wales and across the UK.
As we look ahead to Welsh Government’s Draft Budget (due to be published on 10 December 2024), we need your help to make a strong case for the voluntary sector.
Please complete and share our ten-minute ‘state of the sector’ survey. The closing date is 6 December 2024.