A letter was sent to Labour ministers

The chief executives of over 110 homelessness organisations have signed an open letter to the chancellor warning of the impact of rising National Insurance (NI) contributions. 

The letter, coordinated by Homeless Link, lays out the sector’s urgent concerns about the impact of the rise to National Insurance contributions announced in the Budget.

The pleas were layed out in the correspondence to Rachel Reeves, Labour Deputy Leader Angela Rayner MP, as well as Rushanara Ali MP. 

Signatories include the CEOs of Crisis, St Mungos, Riverside Housing and the National Housing Federation, as well as the chief executives of many smaller local organisations providing vital services in their communities.

The letter states: “We are extremely concerned that in the short term we face a very real threat to the homelessness services that are needed to provide the foundation for future strategic efforts to end homelessness. This will have an immediate detrimental impact on the lives of the thousands of people who are supported and accommodated on a daily basis helping them move on from the worst forms of homelessness and rebuild their lives.

“A significant number of homelessness services commissioned by local government are delivered by not-for-profit organisations. These include everything from street outreach, through to emergency beds, floating individual support and counselling, supported housing provision and upstream homelessness prevention. Many of these services operate a very narrow margin, driven down by years of competitive tendering. In addition, many notfor-profit organisations provide non- commissioned support which is an equally important part of the ecosystem. 

“It is in this context that your proposal to increase National Insurance rates is going to cause a significant challenge to the sector and to our ability to prevent and end homelessness.”

Homeless Link are the membership body for the homelessness sector in England. 

The organisation estimates that the changes to National Insurance will cost homelessness services in England between £50million and £60m per year.

Rick Henderson, CEO of Homeless Link, said: “Homelessness services are already under enormous pressure from overstretched funding, and increasing demand for services as the number of people who are facing homelessness is sky rocketing. 

“Whilst extra money was allocated in the budget it is unclear whether this will reach frontline services or disappear into the temporary accommodation funding black hole.

“I fear that this National Insurance rise could be the nail in the coffin for many service providers. Some are facing hundreds of thousands of pounds in additional tax bills. The public sector is getting a rebate and we want to make sure that this is also made available for vital homelessness services.

“I have rarely seen the sector as angry and frightened as they are by this proposal. It is a very real threat that could impact thousands of people who are currently homeless or threatened with homelessness, leaving them without support. 110 organisations of every shape and size and from every corner of the country have signed this letter. We need action now.”