The First Minister of Scotland, John Swinney, has expressed concerns about the impact of the UK Budget on Scotland’s charities. He called on the UK Government to reimburse charities for the increased cost of employers’ national insurance and emphasized that the tax hike should not apply to the third sector.
During the recent Budget announcement, Rachel Reeves raised the rate of national insurance for employers and lowered the salary threshold. The Chancellor revealed about £40 billion in tax rises, with £20 billion coming from the national insurance increase, citing the need to address the nation’s financial situation.
Swinney highlighted the unintended consequences of the tax hike, estimating that the public sector in Scotland could face costs of up to £500 million. Additionally, various sectors such as GPs, social care, universities, and charities are expected to bear significant financial burdens due to the Budget.
He stressed that it is unacceptable for Scotland’s charities to suffer as a result of decisions made by the Chancellor. Swinney urged the UK Government to fully meet these costs to prevent devastating impacts on frontline services. His Finance Secretary, Shona Robison, also called for full compensation for Scotland’s public sector in light of the national insurance increase.
While the UK Government has stated that additional funds will be allocated to help cover these costs, discussions with the Scottish Government are required to finalize the details. Labour has pointed out that the Budget will provide extra funding to Holyrood in the coming years.
Swinney’s plea for support for Scotland’s charities underscores the significant challenges faced by the third sector in the wake of the Budget. As discussions continue between the UK and Scottish governments, the outcome will determine the extent of financial assistance available to mitigate the impact on essential services provided by charities and other sectors in Scotland.