Voluntary Sector Warns of Redundancies Due to National Insurance Hikes

The chief executive of the Northern Ireland Council for Voluntary Action (NICVA) has stated that the community and voluntary sector anticipates job losses as a result of increased employers’ National Insurance contributions (NIC). One social care service provider projects additional expenses reaching £500,000. Celine McStravick informed BBC News NI that without government intervention, the sector faces collapse, becoming “on its knees,” once these changes take effect in April. She further indicated that some organizations might be compelled to scale back their front-line services. The National Insurance (NI) increase for employers is projected to generate £20bn annually, positioning it as one of the most substantial single tax-raising measures in history. This measure was announced in the Chancellor’s recent budget. Beginning next April, employers will be required to contribute NI at a rate of 15% on salaries exceeding £5,000, a rise from the current rate of 13.8% on salaries above £9,100. The voluntary sector in Northern Ireland employs over 55,000 individuals, representing nearly 7% of the region’s workforce. Many of these entities receive public sector grants to deliver services on behalf of the government. A NICVA survey of 68 organizations revealed that 76% foresee significant financial repercussions from the increase, with many expecting extra costs ranging from £5,000 to £200,000 starting April 2025. Barnardo’s NI, a major social care provider, estimates additional costs exceeding £200,000. Michelle Janes, director of Barnardo’s NI, told BBC News NI that they will be “held accountable” for delivering public services on behalf of public bodies that have been exempted from the NIC increases. She added, “Ultimately, that will have an impact on the babies, children, young people, and families in our communities.” Prior to the NIC rise announcement in October, the sector was already experiencing financial strain from funding cuts. In May 2023, more than 50 community and voluntary groups saw their core funding reduced by 50%. NICVA advocates for voluntary and community organizations to receive the same protection as public sector bodies, through reimbursement for the forthcoming increase in employer NICs. Ms McStravick commented, “I want our sector not to get special treatment but just equal treatment.” She additionally stated her belief that the NIC increase “threatens the very sustainability of Northern Ireland’s voluntary sector at a time when our services are needed most.” Speaking on the BBC’s Sunday Politics Northern Ireland programme, Foyle MP Colum Eastwood characterized this as “another blow” to community and voluntary groups who have been “up against it for a long time.” He remarked, “I think we will see major impacts on the ground unless those organisations are protected.” He further added, “To be honest, I don’t think there’s going to be much good news around that and the executive are going to have to find a way to step in.” Alliance MLA Kellie Armstrong expressed that the potential for reduced services is “extremely concerning” for the Northern Ireland Executive. She described community services as the “backbone of what we do.” Armstrong stated, “If we didn’t have voluntary and community organisations providing the services they have…government would struggle to keep surviving.” She also conveyed that she does not believe there are too many organizations, but finds it “sad” that insufficient funds are available to invest in their work. Andrew Irvine, along with his team from East Belfast Mission, has been distributing nine tonnes of toys to families unable to afford gifts for their children this Christmas. He described the increase in employer contributions to community organizations as “financial madness” that is “going to cost the government money.” Irvine explained, “By effectively sending people in need back to public services, back to their GPs, this is going to cost the government money.” He elaborated, “If you increase employer contributions to community organisations, that money comes directly away from community services. There’s no customer to pass that rise on to, so we will have to reduce our services.”