Rising wage costs threaten charities’ ability to support health and social care, report warns
Increases in wage contributions aimed at funding health and social care will put additional financial pressure on the very charities that are vital in delivering health and wellbeing services.
By Helen Breese | Published on 6 March 2025
Categories: Press office; Research; Nottingham Business School;
The latest VCSE Barometer Survey, conducted by the VCSE National Data and Insights Observatory at Nottingham Trent University (NTU), questioned organisations on their financial outlook and the impact of upcoming rises in the National Living Wage (NLW) and Employer’s National Insurance Contributions (ERNICs).
The results from 665 voluntary organisations showed that around half anticipated negative impacts from changes in ERNICs (54%) and the NLW (47%).
Less than half (48%) feel prepared to absorb these increased costs, and one in five (19%) said they were not prepared at all.
Large and medium organisations, which employ higher numbers of staff, are seen to be more vulnerable to the policy changes and are anticipating making changes to staffing, overheads and service delivery, compared to only one in 10 small organisations.
Over half expect to decrease staff recruitment (59%) and hours (52%), while at the same time increasing redundancies (55%) and relying more on volunteers (68%). Of the organisations expecting to make changes to service delivery, an increase in service prices (53%), reduction in free services (45%) and the overall number of services offered (42%) were the most commonly reported.
Daniel King, Professor of Organisation Studies at Nottingham Business School, part of NTU, leads the Barometer. He said: “The potential harm these policy changes may cause to organisations is already well understood. However, their unintended consequences for health and social care - undermining the very goals the government aims to achieve - have received far less attention.
“Many of these larger charities play a direct or indirect role in delivering services that influence key health and social determinants, such as economic stability, education, and housing - factors that help prevent illness and reduce pressure on healthcare services.
“We are already witnessing the effects of funding cuts on direct service providers, even those who benefit from government grants.
“For example, we’ve seen headlines that Macmillan Cancer Support is facing job cuts at a time when early cancer detection rates are increasing, while redundancies and efficiencies have been announced at Save the Children during a time of increased child poverty.
“The latest Barometer results indicate that adding further financial pressure and uncertainty to essential support organisations will only be counterproductive.”
The Barometer was launched during the pandemic and takes the temperature of the voluntary sector each quarter. The latest wave shows that income, increasing demand and volunteer recruitment remain the top three concerns.
Along with changes brought by policy change, organisations were particularly worried about their funding sources, with around three-quarters rating grants from government, trusts and foundations as high or moderate risk.
The full report and the results of the Barometer, which ran from 22 January to 12 February, can be found online.
Notes for Editors
About Nottingham Business School at Nottingham Trent University
Nottingham Business School (NBS) at Nottingham Trent University (NTU) is a leader in experiential learning and personalisation of business, management and economics education and research, combining academic excellence with positive impact on people, business and society. NBS has an unrivalled level of engagement with business, public and voluntary organisations. With more than 8,500 students, NBS is also one of UK’s largest business schools.
NBS is triple crown accredited by EQUIS, AACSB, and AMBA as well as EFMD BA for International Business, which are globally recognised hallmarks of excellence and quality for business education. NBS is also accredited by Small Business Charter, providing support and development for SMEs. The school is also a PRME Champion and held up as an exemplar and beacon by the United Nations Principles of Responsible Management Education (PRME).
About Nottingham Trent University
Nottingham Trent University (NTU) has been named UK ‘University of the Year’ five times in six years, (Times Higher Education Awards 2017, The Guardian University Awards 2019, The Times and Sunday Times 2018 and 2023, Whatuni Student Choice Awards 2023) and is consistently one of the top performing modern universities in the UK.
It is the 3rd best modern university in the UK (The Times and Sunday Times Good University Guide 2023). Students have voted NTU 1st in the UK for student employability (Uni Compare 2025)
NTU is the 5th largest UK institution by student numbers, with over 40,000 students and more than 4,400 staff located across six campuses. It has an international student population of almost 7,000 and an NTU community representing over 160 countries.
NTU owns two Queen’s Anniversary Prizes for outstanding achievements in research (2015, 2021). The first recognises NTU’s research on the safety and security of global citizens. The second was awarded for research in science, engineering, arts and humanities to investigate and restore cultural objects, buildings and heritage. The Research Excellence Framework (2021) classed 83% of NTU’s research activity as either world-leading or internationally excellent.
NTU was awarded GOLD in the national 2023 Teaching Excellence Framework (TEF) assessment, as it was in 2019.
NTU is a top 10 for sport (British Universities and Colleges Sport league table 2023).
NTU is the most environmentally sustainable university in the UK and second in the world (UI Green Metric University World Rankings, 2023).