Evidence library

Nearly nine in ten charitable organisations say they are concerned about affording the government’s increase to the rate of Employer National Insurance Contributions (ERNICs)

The results of a survey conducted by Charity Finance Group (CFG) in November show that most charities (87%) are concerned about their organisation’s ability to afford the additional costs of ERNICs on top of the rises in the National Living Wage (NLW) and National Minimum Wage (NMW), with half of those saying they are concerned ‘a great deal’.

Most charities (80%) said they are now having to explore ways to offset the increase in costs. This will include charities looking to do one or more of the following: increase fundraising efforts; apply for more grants; cut back on charitable services and activities; charge more for paid-for goods and services; hand back local government contracts; freeze pay; freeze recruitment and not backfill vacancies; and reduce staff headcount.

Six in ten (61%) respondents said that it is either likely or very likely that they will consider reducing their number of staff, by not renewing employment contracts or through redundancy.

Nearly seven in ten (67%) charities say they are likely or very likely to cancel the plans they had to expand or create new services and/or take on more staff due to the increase in ERNICs and lowering of the threshold.

The charities that responded to the survey cover a wide range of sectors and services, from hospices and providers of first aid, social and mental health care services, through to shelters for the homeless, and charities for those experiencing domestic abuse.

Full report: https://cfg.org.uk/knowledge-hub/report_cfg_survey_reveals_deep_concern_over_rise_in_ernics

Press release: https://cfg.org.uk/news/media_release_80_uk_charities_say_they_will_have_to_cut_costs