Voluntary sector leaders are pushing for clarity from the government 

Scotland’s membership body for voluntary organisations have warned of the significant financial impact on many in the sector of the Chancellor’s Autumn budget. 

The Scottish Council for Voluntary Organisations (SCVO) has reacted to the UK Government’s first budget under Labour, which set out a number of proposals. 

SCVO and others had previously written to Rachel Reeves and raised with others in the UK Government their concerns regarding an increase to employers’ National Insurance (NI) contributions. 

But no changes were mae as a result of the pleas in Wednesday’s budget, with concerns raised by many charities as a result. 

SCVO chief executive Anna Fowlie, said: “At a time when many voluntary organisations are facing severe financial difficulties, announcements in the UK budget place new strains on the sector, while cutting key funding that people and communities rely on. This comes just weeks after the Prime Minister announced a “new partnership” with the sector.

“The Chancellor’s decisions on employers’ National Insurance will have a significant financial impact on many voluntary sector employers – with an estimated cumulative cost of £75 million to the sector in Scotland.”

The potential impact of changes to NI rates, as well as cuts to Shared Prosperity Funds, were underlined. 

Ms Fowlie added: “While smaller organisations will be protected by the welcome increase in Employment Allowance, many voluntary sector employers will be significantly impacted by these changes.

“Employing more than 133,000 people across Scotland- 5% of Scotland’s workforce - the voluntary sector is a significant employer.  Yet this budget fails to recognise the implications of these changes on the sector.

“Our sector—already strained by rising costs, increased demand, and a bleak funding landscape—cannot afford additional financial pressures.  Many have already had to subsidise public services with their own funds, and increasingly we are hearing of organisations having to close their doors.

“Commitments have been made to mitigate the increased NI costs for public sector employers, in recognition of the financial pressures they face, and the vital services they provide.  While it is not yet clear exactly how this will work, particularly in Scotland, it is imperative that any concessions made also apply to voluntary organisations, in recognition of their financial situations and crucial role in society.

“If the UK government is serious about its intention to work in partnership with the voluntary sector, it must also ensure that all of its own grants and contracts with the sector cover the full costs of employing staff, including today’s NI uplift and welcome increase in the National Living Wage and National Minimum Wage, on an ongoing multi-year basis.  It is vital that  Scottish Government, local authorities and independent funders to do the same on the journey towards Fair Funding for the voluntary sector.

“While the announcement of an extension to the UK Shared Prosperity Fund, a key source of funding for voluntary organisations delivering services to people and communities across Scotland, is to be welcomed, it is bitterly disappointing that the budget has been cut by a third.”