As a charity devoted to providing essential mental health and recovery services across our communities, we feel compelled to speak out about the recent budget decision to increase employer National Insurance Contributions (NICs) for charities. This policy, which is set to take effect next April, will require organisations like ours to allocate a significant portion of our already stretched budgets to cover these additional costs, while our counterparts in the NHS and other statutory services will remain exempt.
The implications of this change for the voluntary sector are huge, and we urge the Chancellor to reconsider this decision. Without intervention, this new policy threatens the very services we provide, services that bridge crucial gaps in the NHS and council provision.
Charities Picking Up the Slack from Public Services
Over the past decade, charities like Bridge Support have taken on an increasingly vital role in social care. As the NHS and local councils have faced their own budget pressures, more and more of their services have been outsourced to the voluntary sector. From recovery colleges to mental health support programs, charities and voluntary organisations now carry much of the responsibility for delivering frontline services that the NHS and statutory bodies once managed directly.
Bridge Support, like many of our peers, provides a range of services designed to meet complex community needs. Many of these services would otherwise fall to the NHS or local authorities, who used to have the funding and staff capacity to deliver them. In recent years, however, this burden has shifted to the voluntary and charitable sector, with charities stepping up to fill these gaps. They have done this, often with lower costs, strong community ties, and a workforce with lived experience that brings unique insight to the services we offer. But we now find ourselves in a position where we will be subject to the NIC increase, an added financial burden that public services remain shielded from.
The Financial Impact
The financial repercussions of this policy change are significant. According to estimates from NCVO (National Council for Voluntary Organisations), charities across the UK will collectively face an additional bill of £1.4 billion a year to cover increased NICs. For many organisations, this expense is simply unmanageable. Charities operate with limited budgets, usually funded by donations, grants, and competitive contracts. These resources are stretched to their limits, particularly as inflation and the rising cost of living push up expenses and increase demand for services.
At Bridge Support, every penny counts. We run on lean budgets and depend on contract income from local councils, the NHS and ICBs to cover our essential costs. The National Insurance hike will mean reallocating funds that would otherwise go directly toward service provision, staff wages, and program expansion. For smaller charities and those operating on the thinnest of margins, this extra expense could make the difference between staying open or closing their doors.
The Threat to Frontline Services
If charities like ours are forced to absorb this increase, the impact on services will be severe. This change is not just a financial issue, it will affect the wellbeing of our communities. The services we provide are not “extras” or “nice-to-haves”—they are essential, life-saving interventions that people rely on every day. Mental health support, recovery colleges, crisis intervention, and housing assistance are all areas where we have a direct, positive impact on people’s lives.
Without relief from these increased costs, the choices before us are stark: either cut back on staff, reduce salaries, or scale back services. The sad reality is that for many in the voluntary sector, these choices will result in less support for those who need it most. The people who lose out are often those most vulnerable.
The Double Standard: Public Sector Exemptions
One of the most troubling aspects of this policy change is the double standard it creates between the voluntary and statutory sectors. While the NHS and councils will continue to be exempt from employer NICs, charities providing the same services will face an increased rate. For example, NHS-run recovery colleges remain exempt from paying National Insurance on staff wages, while Bridge Support’s recovery college staff, who deliver an equivalent service rooted in the community, will now have this additional cost.
If these services were still under the direct purview of the NHS or local authorities, they would remain NIC-exempt. But because they are now provided by charities like ours—organisations that operate on behalf of and in collaboration with public bodies—this exemption no longer applies. This inconsistency disregards the value that charities bring to the social care system and overlooks the significant cost savings we provide for the public sector.
The Ripple Effects on Public Services
Ironically, if this policy leads to a reduction or closure of charity-provided services, it will likely have the opposite effect of what the government intends. With our services disrupted, the demand for support will simply shift back to the NHS and councils, which already lack the resources and capacity to meet existing needs. In some cases, GP surgeries and community mental health services may even be forced to close due to the added demand, creating further strain on an already overstretched healthcare system.
Bridge Support and other charities play a crucial role in reducing pressure on statutory services. For every person we support, that’s one less person seeking help from public services. The NHS and councils would have to manage increased caseloads leading to longer wait times, reduced access to care, and potentially higher costs for the government in the long term.
An Appeal for Equality
Our message to the Chancellor is simple. Charities that provide essential services on behalf of the NHS and local councils should be given the same exemption from employer NICs as public bodies. This is not a request for special treatment but for fair consideration of the role we play in supporting public services. If the voluntary sector is expected to continue delivering these essential services, it is only fair that we receive the same support as our statutory counterparts. We call on the Chancellor to rethink this policy, protect essential services, and ensure the long-term resilience of the voluntary sector. Please sign the petition here: https://petition.parliament.uk/petitions/700080?sfnsn=scwspwa
Further Reading:
National insurance hike could force GP surgeries to close, doctors’ leaders warn
National Insurance hike could cost the charity sector £1.4bn a year
National insurance hike will hit ‘essential’ charity services
