Natalie Zhivkova, WCVA’s Policy & Insights Manager, recaps the latest draft budget developments as six out of nine Senedd committees speak up for the sector.
It’s been a busy new year for policy staff and CEOs of voluntary organisations. The sector has been making a strong case for Welsh Government to introduce mitigating measures in response to the upcoming rise in Employer National Insurance Contributions (NICs).
It was fantastic to see the Senedd’s draft budget debate reflecting our efforts as sector asks were echoed in committee report recommendations and pointed questions from the opposition.
BUILDING PRESSURE
WCVA’s calls continued to receive national media coverage throughout January. Our concerns were highlighted by Nation Cymru and Business News Wales. We were invited to give evidence to the Finance Committee, which garnered further media attention from Wales Online and ITV Wales’s six o’clock news.
Welsh charities came together quickly and provided us with overwhelming evidence, which enabled us to make a very strong case on behalf of the sector. But besides the collective effort, we saw some excellent individual campaigns too, which clearly captured the attention of the general public and politicians.
COMMITTEE RECOMMENDATIONS
Six out of the nine Senedd committees backed our sector’s concerns relating to the increase of Employer NICs. It’s extremely rare to see a voluntary sector issue garner near universal support and attention across Senedd committees. The asks we made were listed in Senedd Research’s top five budget scrutiny topics this year. This is a testament both to the gravity of the situation, and the power of our collective voice.
Finance Committee
The Finance Committee asked the Cabinet Secretary to provide and assessment of the impact on voluntary organisations before the Final budget debate (recommendation 11). They called on Welsh Government to work with local authorities and other public bodies to distribute additional funds for commissioned services impacted by the increase (recommendation 13)
Scrutiny of the Welsh Government Draft Budget 2025-26.
Health and Social Care Committee
The Health and Social Care Committee asked for an urgent assessment of the impact on organisations delivering health and care services and how Welsh Government intends to support them (recommendation 20).
Welsh Government draft budget 2025-26.
Local Government and Housing Committee
The Local Government and Housing Committee called on Welsh Government to make representations of the impact on voluntary organisations in Wales to UK Government and update the Senedd on the outcome of the discussions (recommendation 7).
Welsh Government Draft Budget 2025-26.
Children, Young People and Education Committee
The Children, Young People and Education Committee asked Welsh Government to clarify what NIC mitigation support it will be providing to voluntary organisations delivering critical frontline interventions for children and young people (recommendation 5).
Welsh Government Draft Budget 2025-26 – Report of the Children, Young People and Education Committee.
Culture, Communications, Welsh Language, Sport, and International Relations Committee
The Culture, Communications, Welsh Language, Sport, and International Relations Committee asked for an assessment of the impact on voluntary organisations supporting and promoting the Welsh language and the proportion of allocated Draft Budget funding which will be absorbed by the NIC increase (recommendation 6).
Scrutiny of the Welsh Government Draft Budget 2025-26
Equality and Social Justice Committee
While the Equality and Social Justice Committee did not make any written recommendations relating to National Insurance, the Chair of the Committee brought the issue up during the draft budget debate. The Chair stated the Committee is not able to assess whether the increased funding for the voluntary sector will be sufficient to cover rising expenses. She asked for Welsh Government’s assessment of the impact of increased employer NIC on the voluntary sector in Wales.
THE DRAFT BUDGET DEBATE
Despite all committee contributions and passionate representations from opposition spokes people, the Cabinet Secretary for Finance and Welsh Language reaffirmed his position. He refused to introduce a specific mitigating measure for voluntary organisations. This brought a new wave of disappointment for the sector.
Following the debate, Welsh Labour won a non-binding vote on the draft budget, aided by the abstention of Jane Dodds MS.
MEETING WITH THE CABINET SECRETARY FOR SOCIAL JUSTICE
Last week, the Third Sector Partnership Council (TSPC) met with the Cabinet Secretary for Social Justice. Representatives expressed their disappointment over the lack of clear Welsh Government strategy to address the adverse impact the National Insurance increase is having on the voluntary sector. TSPC members highlighted that there is no consistency in the stances public bodies are taking in relation to uplifts of existing contracts. They warned that the difficult decisions voluntary organisations will be forced to make will inevitably have a knock-on effect on the NHS and local authorities.
The Cabinet Secretary acknowledged the concerns and confirmed she will continue raising awareness of the difficulties faced by the sector with her colleagues. She invited members to submit examples showcasing the varying responses they have received from public funders so far. The Cabinet Secretary stressed the budget is still in a draft form and the sector should continue suggesting solutions.
NEXT STEPS
We are yet to see if Welsh Government follows committee recommendations and provides a thorough assessment of the impact and how it intends to address it. The final budget is due to be published on 25 February 2025. A final debate and vote will take place on 4 March 2025.
Read our previous articles on the issue:
WCVA shares sector’s concerns on National Insurance increases