In the 2024 Autumn Budget, the Chancellor announced a rise in employer National Insurance Contributions (NIC) which will raise costs considerably for charities and the wider VCSE sector across the country. VONNE has been working with data experts in the charity sector to estimate the impact on our region, you can read more about what we did in this blog.
The increase in National Insurance Contributions (NIC) for charities is going to have a huge impact on organisations abilities to deliver services and retain staff. Following the announcement of the Autumn Budget, the National Council for Voluntary Organisations (NCVO) and ACEVO lobbied the government with an open letter co-signed by over 7,300 charities, outlining concerns for the sector. They estimated that the sector’s total increased cost of employer NICs will be £1.4bn per year - another major strain where so many organisations are already struggling to meet soaring demands for services, escalating costs and funding challenges.
The North East charity sector is made up many small organisations and few very large ones. As such, the national figure of £1.4bn bears less relevance locally and a regional figure holds more value. VONNE has compiled a report, with detailed input and support from Tony Chapman, Professor of Practice at Durham University and data from the most recent unpublished Third Sector Trends to estimate this regional figure.
The rise in employer NICs together with the higher employer allowance is estimated to add £19.5 million to the costs of the workforce in the region in 2025/26. We believe this is the first detailed attempt to produce a regional figure for the impact of the rise.
The report is available for you to download here, it’s broken down into combined authority areas and also gives the North East and North Cumbria ICB figure. Please use this information as required. We know that many of you will be speaking to funders about the impact of increased costs, and local North East contacts from key funders including BBC Children in Need and the National Lottery Community Fund have already indicated they’re available for conversations with charities who will struggle to meet the increased staff costs.
Our approach has been endorsed by colleagues at Pro Bono Economics, and VONNE and our local infrastructure partners will continue to do what we can in conversations with our networks to share this intelligence and advocate for support for the sector.