Impact of employer National Insurance increase on Thistle Foundation
Today, Friday 29th November, the Coalition of Care and Support Providers in Scotland (CCPS) published a letter to the Chancellor, calling on the UK Government to reverse what is a disastrous decision for a sector that is a partner in the delivery of vital social care services.
This is a decision that has implications for social care providers in Scotland and beyond. For our CCPS community of not-for-profit organisations we face a joint additional bill of around £30 million per year.
Thistle Foundation Chief Executive, Mark Hoolahan, said, “The Chancellor’s announcement about an increase in National Insurance contributions for employers has been a catastrophic blow for the Health and Social Care sector, a sector that is already struggling with a historical and chronic lack of investment. We support the Coalition of Care and Support Providers in Scotland’s (CCPS) call for the Chancellor to reverse these National Insurance policy changes for charitable and not-for-profit organisations delivering public services.
“We are operating in a challenging financial landscape which has seen costs soar whilst year after year, in real terms, budgets have been cut. These are budgets relating to statutory services that Government agencies are required to provide by law. Frustratingly, it demonstrates a clear lack of understanding, by the UK Government, as to how this decision will impact on people’s lives – people who require support to live their daily lives and the skilled workers who support them. For the many non-profits and charities commissioned to deliver these vital public services, like Thistle, there are no costs left to save. The UK Government is putting these services at risk.
“The changes announced by the Chancellor, to employer National Insurance contributions, have significant implications for Thistle. They will compound our current financial challenges creating an additional, unfunded, financial gap of £292,000:
Change in earnings threshold from £9,100 to £5,000 – total cost to Thistle, £211,000.
Increase in percentage rates applied for employee contributions from 13.8% to 15% - total cost to Thistle, £81,000.
“As a not for profit, every penny we spend is invested in delivering quality support that gives people we work alongside choice and control over their lives. Yet we find ourselves in the unenviable position of considering how we will manage this increase in costs, where it will come from and how the decisions we take might impact on the 97 people we support across Edinburgh, the Lothians and Fife, their families and the 350 social care workers that we employ.
“The Chancellor must reconsider this approach. This is a Budget that will not save public services; it will crush them. We stand with our colleagues, people we support and the wider sector and call on the Chancellor to clarify, now, how they intend to provide UK relief, in full, for a UK policy change on Employers’ National Insurance for not-for-profit providers of crucial public services.”
