There have been stories in the media recently about the impact on the charity sector of the Labour Government’s plan to increase the rate of Employers’ National Insurance.
From next April, unless something is done to change the situation, £1.4 billion that should be used to deliver services to a wide range of people in need will be diverted to fund the increased wage bill of the charities delivering those services.
At Framework we have been making the case for some time that the inadequate supply of housing, the decommissioning of prevention work, and the catastrophic loss of funding for supported housing, have all played their part in fuelling the housing crisis and the increase in rough sleeping.
So far the new government has done nothing to reverse the mistakes of the last one. Instead this unexpected rise in employers’ national insurance contributions will make a bad situation worse. For Framework this increase means an additional bill of £1.1 million a year to pay for Employers’ National Insurance contributions, in addition to the extra £700,000 required to cover the increase in the National Living Wage.
Heroic work has been done by colleagues across the organisation to make savings in recent years that have enabled us to continue balancing the books. But the cost-saving has been done: finding a further £1.8m a year of savings is a huge challenge.
So the government needs to extend to the charity sector the exemption from this increase that has been granted to the public sector (local government and the health service for instance). The only alternative for organisations like Framework to remain viable will be to make cuts to frontline services.
The Senior Leadership Team and the Board want Framework to make the case as vigorously as possible to ensure this situation is avoided. We have added our name to letters to the Chancellor from representative bodies such as the National Council for Voluntary Organisations, the Association of Chief Executives of Voluntary Organisations, the National Housing Federation and Homeless Link.
Now our Deputy Chief Executive Claire McGonigle and I have made our own video to draw attention to the situation faced by Framework, and the charity sector as a whole, and the dire consequences for people in need if nothing changes.
We will use this video to support our argument for a national programme to commission housing-related support. Until that programme exists we expect to see further increases in single homelessness and rough sleeping.