CEO Nick Connolly spoke to the Independent about how young people experiencing homelessness are set to lose out on vital support after the National Insurance tax hike.

From April, employer National Insurance Contributions (NICs) will start at a lower threshold than now, at £5,000 instead of £9,100, and the contribution rate will rise from 13.8% to 15%.   

Our Network of youth homelessness charities across the UK is set to lose £1.73m from collective budgets – the equivalent of axing more than 60 frontline workers from our government funded services.  

It is estimated 1 in 52 young people are homeless or at risk of homelessness in the UK. Between April 2022 and March 2023, a record-breaking 136,000 young people faced homelessness. That’s one young person every four minutes. 

But our Network’s ability to help young people learn independent living skills and navigate the transition to adulthood will be hindered by the NIC changes.  

In a letter to the National Council of Voluntary Organisations (NCVO), Chancellor Rachel Reeves confirmed the public sector will be exempt from the tax hike, but not charities. 

She said “the government has committed to provide support for departments and other public sector employers for additional employer NICs costs only”. 

The Chancellor appears to draw a firm distinction between work undertaken by the “public sector” and “charities” which is inaccurate.   

Many of the services our Network provides are statutory.  Local authorities are obliged to do this work, but they contract with charities in our Network – and others – to do it on their behalf. This is categorically “public sector” work.  

The Chancellor’s current approach of only protecting services delivered by public sector bodies creates a two-tier system where some public sector work is fully funded while other public sector work – which in our case supports the most vulnerable young people in our society – is not. 

Charities do not make a surplus on this work. There are no fat cats or shareholders reaping rewards at the taxpayers’ expense. 

Does the Chancellor think charities should subsidise the Government’s statutory costs with donations?  

I have written to Deputy Prime Minister Angela Rayner requesting a meeting, warning that her commitment to ending homelessness is being undermined by the NIC changes.   

Unless the Ministry of Housing, Communities and Local Government increases the funding of these statutory services, it is inevitable that young people experiencing homelessness, many of whom are care leavers, will suffer.

Nick Connolly 
EveryYouth CEO