Budget 2024: What does it mean for the North East and for charities?
Earlier this week, the Chancellor unveiled the 2024 budget and spoke about the ‘difficult choices’ made in order to stimulate growth. These include a significant increase in employers’ national insurance contributions (NIC), a reduction of the threshold at which employers need to pay and an increase in the national living wage.
While an increase in national living wage is a positive for individuals and households, especially where 2022/23 figures reported by the North East Child Poverty Commission showed that 69% of children in the region living in poverty across the UK were from working households, the changes are also a huge cause of concern for organisations, especially charities who will have to find additional funds to pay higher National Insurance contributions and wages.
The head of ACEVO, the Chief Executive’s body, Jane Ide, reacted to the budget saying, “We are deeply concerned about the impact the triple whammy increase will have on civil society organisations and the work they deliver. Civil society leaders have very limited choices to make in how to manage these significant increases in operating costs. The harsh reality is that many organisations may be forced to reduce staff, cut salaries, and more importantly, scale back services for the very people they strive to support.”
Lisa Goodwin, Chief Executive at Connected Voice commented on LinkedIn that “Small charity employers are left scratching their heads about where we’ll find the additional employer costs when our budgets are already so tight and our contracts don’t keep pace with inflation.”
In their budget overview, NCVO acknowledges that fair wages are essential, but the rising costs will intensify the “triple squeeze” charities face from increasing costs. That’s why, along with sister councils across the UK, they wrote to the chancellor last week urging her to reimburse charities for NI costs, a commitment already made to public sector organisations.
Following this, NCVO and ACEVO have written an open letter to the chancellor calling for urgent action on the planned increase in NIC. You can read and sign the open letter here.
Charity Finance Group (CFG) have launched a post-budget survey and are asking charities to share their views on the impact of the announcements. Responses are confidential and the survey is open until 15th November.
You can read more about the Autumn Budget and Spending Review 2024 in the Charity Finance Group Knowledge Hub here, and from the Northern Agenda panel here.