The planned increase in employer National Insurance contributions is posing a significant threat to the sustainability of Northern Ireland’s voluntary sector, according to Celine McStravick, the chief executive of the Northern Ireland Council for Voluntary Action (Nicva). Without prompt government intervention, the sector is expected to face widespread service cuts, job losses, and reduced support for vulnerable communities. Research from Nicva reveals that 76% of Northern Irish voluntary organizations anticipate adverse effects on their budgets due to the National Insurance hike.
The change in employer National Insurance contributions, increasing by 1.2 percentage points, is projected to cost the UK voluntary sector £1.4 billion annually. Many organizations foresee unavoidable redundancies, particularly in core administrative roles, and significant reductions in services, including childcare, disability support, mental health services, and community programs. With demand for these services at critically high levels, this financial strain could not come at a worse time for the voluntary sector. The projected cost increase stands to severely disrupt the essential services these organizations provide, leaving many vulnerable populations without the support they rely on.
The Financial Burden
Detailed findings from a Nicva survey of 68 organizations indicate that half expect their budgets will need to increase by between £5,000 and £200,000 to manage the new costs. Specifically, 19 organizations foresee needing an additional £5,000 to £50,000, while 15 predict a requirement of £51,000 to £200,000. Only one charity reported needing an increase of up to £500,000. These figures highlight the varying levels of impact across different organizations, with smaller charities potentially facing less severe financial burdens compared to their larger counterparts. Nonetheless, the financial stress is evident and widespread, causing considerable concern within the sector.
Meanwhile, 18% of the organizations, primarily volunteer-led or without employees, anticipate that the hike will have no effect on their budgets. This subset, while seemingly untouched by the changes, represents a minor fraction of the overall sector. The majority are bracing for a significant financial hit, which could lead to difficult decisions regarding staffing and service provision. The pressure to find additional funds is adding to the already strained resources of many charities; public fundraising efforts and grant applications may become even more competitive as organizations battle to stay afloat.
Calls for Government Intervention
The planned hike in employer National Insurance contributions represents a substantial risk to Northern Ireland’s voluntary sector’s viability, notes Celine McStravick, chief executive of the Northern Ireland Council for Voluntary Action (Nicva). Urgent government intervention is necessary to avoid extensive service cuts, job losses, and diminished support for at-risk communities. Nicva research shows 76% of Northern Irish voluntary groups anticipate negative budget impacts due to this National Insurance increase.
The 1.2 percentage point rise in employer contributions is expected to cost the UK voluntary sector £1.4 billion annually. Many organizations predict unavoidable layoffs, especially in core administrative roles, and sharp decreases in services like childcare, disability support, mental health services, and community programs. With demand for these services critically high, this financial burden could scarcely come at a worse time. The anticipated cost increase threatens to severely disrupt these organizations’ vital services, leaving many vulnerable individuals without the aid they depend on.
