Voluntary organisations and charities in Powys are being asked to share how the planned increase in employer national insurance (NI) contributions will affect them.
The Powys Association of Voluntary Organisations (PAVO) is seeking feedback from the third sector on the impact of the rise, which was announced in the UK Government’s 2024 Autumn Budget.
From April 2025, the employer NI rate will increase by 1.2 percentage points, from 13.8 per cent to 15 per cent, while the threshold at which employers start paying NI on employee salaries will drop from £9,100 to £5,000.
Clair Swales, PAVO CEO, said: "The increase in employer national insurance contributions will place considerable financial pressure on voluntary sector organisations in Powys.
"Many of these organisations are crucial partners in delivering essential services and they already operate under tight budget constraints.
"Without adequate support, many may be forced to reduce or cease services altogether."
Ms Swales also highlighted that public sector employers will receive reimbursement for the additional costs, but no equivalent measures have been announced for the third sector.
OTHER NEWS:
- Powys farmer died after head-on crash involving car and van, inquest hears
- Powys leisure centres talks pulled from meeting as councillors slam proposals
- Powys town's former cattle market to be used as pay and display car park
She said: "This, coupled with rising costs, static or reduced funding, and growing demand for services, creates a potentially catastrophic situation."
One Powys-based mental health charity, which supported more than 1,300 county residents last year, estimates that the NI rise will add at least £15,000 to its operating costs next financial year.
This will strain its ability to meet demand.
Feedback from organisations will be shared with the Wales Council for Voluntary Action (WCVA) to inform advocacy efforts aimed at securing solutions and support for the sector.
Earlier this month, Ms Swales joined other sector leaders in signing a WCVA-coordinated letter to the Welsh Government.
The letter urged the government to consider the financial strain on voluntary organisations in its upcoming draft budget and to uplift grants and contracts to reflect inflationary pressures and the additional tax burden.
Ms Swales added: "Urgent adjustments are needed to ensure the sustainability of our sector."
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here