Employer National Insurance: why we must keep up the pressure

Over the past few months, the implications of the increase in Employers’ National Insurance Contributions for medium and large employers in the voluntary sector has attracted lots of media coverage.  This has helped to increase public understanding of the precarious nature of voluntary sector funding, but it appears to be largely ignored within government.  Seemingly impervious to the £75mil blackhole for Scotland’s voluntary sector, and the fact that voluntary organisations have next to no opportunity to raise these additional funds, the UK Chancellor, Rachel Reeves MP, has shut her eyes to the inevitable implications for voluntary organisations and services, and hoped that the voluntary sector will somehow fix it.

Much of the media coverage has focused on organisations operating in the field of social care - largely thanks to the strong campaigning work of colleagues from the Coalition of Care and Support Providers in Scotland, and the individual organisations who have come forward to talk publicly about the likely implications.  It is important to remember, however, that this issue will impact on all voluntary organisations that are medium or large employers - not only those in social care, and not only those in receipt of public sector funding. One of the case studies that we used in our original work on this issue was the SSPCA – a cornerstone organisation in Scottish society, and entirely reliant on fundraised income.

That is why we must not give up on pushing the government at Westminster to recognise this issue and solve the problem at source.  Through our Fair Funding work, we will continue to call on all funders to ensure that grants and contracts cover full costs, including the increase in NICs, but that won't help organisations not in receipt of grants and contracts; it also shifts the focus away from the implications of the Chancellor's decision. The UK Autumn Budget created this problem, and the UK Government can and must offer a solution. 

We first raised this issue with the Chancellor back in October, before her budget was even announced.  We have kept up pressure since, briefing MPs as the regulations pass through parliament, and adding our voice to calls to the Chancellor from Scottish civil society.   Next week we will brief peers ahead of final House of Lords debate on the issue.  The continuing lack of actions from government puts some voluntary sector services and organisations at risk, and seriously undermines the promises made by this new government about partnership working with the sector.

But this shouldn’t be a debate about services, or organisations, or sectors.  It’s a debate about people.  The Chancellor needs to listen to organisations like C-Change Scotland, who are bravely and powerfully documenting the potential impact of the rise in NICs on the people they work with.  The same will be true for the beneficiaries of the wide range of services and campaigns supported by organisations right across our #EssentialSector.

To keep up pressure on the issue,  SCVO will brief peers shortly ahead of further House of Lords debate on the issue.  To share how an increase in NICs cost will impact your organisation, the services you provide, and the communities you support contact me at kirsten.hogg@scvo.scot