Andy Burnham and Councillor Arooj Shah demand urgent government action to protect Greater Manchester’s VCFSE sector from budget strains

The Mayor of Greater Manchester, Andy Burnham and Leader of Oldham Council, Councillor Arooj Shah, have called on the Chancellor of the Exchequer, Rachel Reeves, to urgently reconsider proposed National Insurance (NI) changes that could devastate the region’s Voluntary, Community, Faith, and Social Enterprise (VCFSE) sector.

This was prompted by the work of the GM VCFSE Leadership Group, which has been instrumental in strengthening partnerships with the VCFSE sector under the Greater Manchester VCFSE Accord.

The letter to Rachel Reeves is in response to the Autumn Budget announcement of an increase in employer NI contributions from 13.8% to 15% and a reduction in the Secondary Threshold to £5,000. While supporting the government’s broader economic goals, the letter highlights the disproportionate burden these changes would place on an already overstretched VCFSE sector who, unlike many public sector organisations, are not exempt from these increases.

Mayor Andy Burnham and Cllr Shah underscored the sector’s essential role in Greater Manchester, where it generates £1.2 billion in income annually and contributes an additional £692 million in public value. They warned that the proposed NI changes - estimated to cost individual organisations between £20,000 and £50,000 per year, and £38 million across the region - would exacerbate existing financial pressures caused by austerity, the COVID-19 pandemic, and the ongoing cost-of-living crisis.

Warren Escadale, Chair of the Greater Manchester VCFSE Leadership Group, emphasised the urgency of the situation:

‍“The proposed changes to National Insurance contributions will hit the VCFSE sector hard, jeopardising the essential services it provides, and the trust built within communities across Greater Manchester. The VCFSE sector is not just a safety net; it’s a lifeline for so many people. We urge the government to engage with us to find solutions that work for everyone.”

The letter calls for a meeting between Treasury officials and members of the Greater Manchester VCFSE Leadership Group to discuss strategies to mitigate these challenges. The leaders argued that supporting the VCFSE sector is vital for ensuring the continuation of community services and safeguarding its significant economic contributions.

This appeal builds on the Greater Manchester VCFSE Leadership Group’s dedication to fostering a stronger, more resilient sector. The Accord and its associated initiatives have demonstrated the value of coordinated efforts between the sector and local authorities, and the Greater Manchester VCFSE Leadership Group will remain committed to working with local decision-makers to prevent communities from being disproportionately impacted by this decision. However, as the letter stresses, there is a need for meaningful engagement with Whitehall to ensure that national policies align with the realities faced by VCFSE organisations on the ground.

The government’s response to this urgent call will be closely monitored across Greater Manchester and beyond.