North Wales MS Mark Isherwood has warned that the significant hike in National Insurance announced in the UK Government’s recent budget will place huge pressures on charities and third sector bodies and impact their service delivery.
Mr Isherwood raised the matter in yesterday’s meeting of the Welsh Parliament and called on the Cabinet Secretary for Finance, Mark Drakeford MS, to support them.
He said:
“One of the damaging consequences of the UK Government's recent Budget was the National Insurance hike on Charities and Third Sector Bodies.
“Office of Budget Responsibility figures show that the average annual tax increase for employers will be ‘in excess of £800 per employee’. With approximately 134,500 people working in the Welsh voluntary sector, even with part-time work this would suggest a total increase in the sector's National Insurance bill of around £100 million a year.
“As the WCVA (Wales Council for Voluntary Action)’s letter to you states 'Many voluntary organisations in Wales operate under tight financial constraints and play a vital role in delivering essential services alongside the public sector, yet only public sector employers are set to be reimbursed for these increased costs.
'This...is a significant new cost that many organisations simply cannot absorb without a corresponding impact on their service delivery'.
“The Welsh Government relies on these services, so what, if any, support will you provide the Charitable Sector to safeguard these vital services and mitigate against this short-sighted policy?”
In his response, the Cabinet Secretary, Mark Drakeford MS, blamed “the legacy of the decisions made by that previous Government”.
Speaking outside the meeting, Mr Isherwood said:
“In reality, this threatens cuts to vital services and consequent additional resource pressures on public services, just as this Budget threatens to keep inflation, interest rates and mortgage rates higher, resulting in slower growth in later years, and therefore lower tax revenues and Government spending”.