Charities have warned of “life-changing consequences” for one million vulnerable children and adults as a result of cuts to state-funded disability services due to tax changes and wage increases announced in the Budget.
of Voluntary organization Disabled person organization VODG, which represents 100 UK charities, says Rachel Reeves' decision to increase employers' National Insurance Contributions (NICs) is “ill-considered” and will put many local charities at risk. He said it would be.
The warning comes amid a report in the Guardian that the government is set to provide a financial lifeline to protect hospice charities, which will receive £30m a year from increased NICs. They argued that it would be costly and could lead to cuts or closures of end-of-life services.
VODG, which represents well-known organizations such as Mencap and Sense, as well as a number of smaller disability charities, said many of its members would have to make cuts to staff and services due to the NIC and the national minimum wage hike. Ta.
It is said that the quality of services provided to people with disabilities who are supported to live independently will deteriorate. Many disability charities will be forced to hand over contracts to local authorities because they cannot safely deliver the services they provide with available funding.
“Social care is designed to protect the most vulnerable people in our communities and this Labor government is failing them,” said VODG chief executive Lydian Hughes. .
Independent sector providers of public services, who are not protected from the effects of NIC price rises, unlike the NHS and local authorities, and who, unlike private companies, are unable to pass costs on to consumers, will be affected by the impact additional costs will have on their livelihoods. He says he is becoming increasingly cautious. Economic viability.
The National Council of Voluntary Organizations met last week with Civil Society Minister Stephanie Peacock to discuss the crisis, and wrote an open letter to the government warning of the “dire situation” currently facing more than 7,000 member charities. announced that it had signed. The volunteer sector is shrinking as a result of rising costs.
The Treasury has previously been adamant that charities and private businesses cannot be exempted from the NICS increase, but the prospect of a voluntary hospice exemption offers new hope that a broader agreement can be reached. is given to charity.
The sector believes the rise in National Insurance contributions will be the third fiscal crisis in the past five years, after coronavirus and the cost of living crisis. The company believes that failure to address the issue could undermine attempts by Chancellor Keir Starmer to establish what he called a “new social contract” with charities earlier this year.
The charity sector employs one million people and provides services worth around £17 billion a year in areas such as social care, addictions, health, homelessness and hospice care. Charities estimate they will face an additional bill of £1.4bn as a result of the changes.
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Separately, more than 100 homeless charities, including Crisis and St Mungo's, delivered an open letter to Prime Minister Reeves on Monday, warning: NIC price rise could cost frontline services up to £60m a year Street assistance, emergency beds, supported housing, and more.
Rick Henderson, chief executive of Homeless Link, which organized the letter, said he had “rarely seen the industry so angry and scared” by the planned NIC increase. Ta. “This is a very real threat that could impact thousands of people who are currently homeless or at risk of becoming homeless, and could potentially lose access to support.”
A government spokesperson said: “We have had to take difficult decisions to repair the foundations of our public services, meaning we will strengthen our health and social care system by an additional £22.6 billion and announce £1 billion to reduce homelessness. It means you can do it.”
“Our tax system for charities, including the exemption from paying corporation tax, remains one of the most generous in the world and is worth just over £6 billion a year to the sector.”
