North Wales MS Mark Isherwood has expressed concern that the UK Government’s National Insurance increase will have a negative impact on services provided by Hospices and other charitable bodies.
Speaking in the recent Debate on the Welsh Government’s Draft Budget for 2025-26, Mr Isherwood referred to the Wales Council for Voluntary Action statement that the National Insurance hike “is a significant new cost that many organisations simply cannot absorb without a corresponding impact on their service delivery”, and emphasised that this applies to bodies ranging from Hospices in Wales to charity Adferiad, which supports people with complex mental health and addiction needs.
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 for Budget Responsibility figures show 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 Wales Council for Voluntary Action 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’, they said, 'that many organisations simply cannot absorb without a corresponding impact on their service delivery'.
“The Welsh Government relies on these vital services, which will only be safeguarded if the Welsh Government supports the Charitable Sector and mitigates this short-sighted policy. This applies to bodies ranging from Hospices in Wales, facing serious financial challenges and having to consider significant cuts, which would leave huge gaps in provision for the communities they serve that the Health Boards won't be able to replace; to Welsh Women's Aid, facing increasing costs, impossible decisions and tight budgets; to member-led charity Adferiad, providing help and support for people with mental health, addiction and co-occurring and complex needs, who told me last Friday that, on National Insurance alone, the Chancellor's Budget will cost them £600,000 a year, and without mitigation, they will have to let staff go and reduce services. Unless the Welsh Government's Budget enables the vital services provided by organisations such as these to continue and grow, the resource demand on statutory public services will grow exponentially.”
During the Debate, Mr Isherwood also quoted the statement by the Director of the Institute for Fiscal Studies that measures in the UK Chancellor’s Budget last October “were likely to keep inflation and interest rates higher, resulting in slower growth in later years” and noted that The CBI’s post-Budget survey revealed that nearly 2-thirds of firms reported that the Budget would damage UK investment, with half looking to reduce head count in consequence, adding that “overall, this will therefore mean lower tax revenues, lower Government spending, cuts to vital services and consequent additional pressure on public services”.