Charities under pressure from Labour's tax hike

The Guardian reports that services that support some of England’s most vulnerable people have warned that tax increases in the budget will lead to cuts and closures that could devastate the charity sector.

The paper says that although the NHS and councils are protected from the impact of the rise in employers’ national insurance contributions (NICs) announced in Wednesday’s budget, charities that provide services say the increase means they will face “existential” financial pressures:

Family doctors and pharmacists – who provide NHS-funded services as private providers – also demanded they be exempted from the rise, saying the extra NICs costs could force a reduction in primary care services.

Ministers are under pressure to intervene to prevent a financial crisis among charity providers, including those delivering high-cost care to adults with learning disabilities, severe autism, complex needs and severe physical disabilities.

The backlash over NICs has thrown fresh light on the crisis facing social care, which took a backseat in the budget compared with the NHS. The health service got an extra £22.6bn, while councils in England received just £600m more to cover adult and children’s social care.

The Liberal Democrat leader, Ed Davey, has called for social care providers to be exempt from the NICs rises, while the Labour backbencher Rachael Maskell called on ministers to consider the impact of the increase on GPs, care providers and hospices.

“We know that these contracted health and care services have been through a lot of financial strain under the last government, and they too need to fix their foundations and build stability for the future,” Maskell said.

These issues will apply in Wales as well, though we are still waiting to hear how the Welsh Government will mitigate the extra costs for councils and the NHS.