Devon charities seek cash help as tax hike threatens services

A group of Devon charities is urging the government to give them extra funding to help them cope with national insurance increases.

Andy Moreman, chief executive of the South West charity Young Devon, told the Torbay Weekly of his serious concerns for the impact of the tax changes.

Young Devon has been supporting the county’s most vulnerable young people for 76 years. It provides housing for over 100 young people each night across Devon, including Torbay, and offers mental health support to more than 3,000 young people each year. 

The charity also helps victims of crime and supports young people who have left school or college without any qualifications.

“We do a whole host of work that supports the public sector,” said Mr Moreman.

The charity works on behalf of Torbay Council, Plymouth City Council and Devon County Council, as well as  district and town councils.

Above: Andy, Ros Arscott (YD Head of Wellbeing) and Vince Flower (YD Chair of Trustees) at the opening of one of our mental health spaces for young people

Although Young Devon was initially pleased with the Labour government’s plans to work more closely with the charity sector, Mr Moreman said their optimism faded after the Chancellor Rachel Reeves’ October Budget.

The government plans to increase the employer national insurance rate from 13.8 per cent to 15 per cent and lower the threshold at which employers start paying national insurance from £9,100 per year to £5,000.

The government argues that these changes will help repair public finances and generate the revenue needed to increase funding for public services. However,  charities like Young Devon say the changes will mean less funding for vital services that directly support the public sector.

Mr Moreman said: “Reducing the threshold at which people start paying national insurance has had a massive impact on us.”

With rising costs, Young Devon needs an additional £90,000 this year just to maintain the same level of services as last year. They say the increased employer national insurance contributions will further strain resources, leaving no extra funding to deliver   services.

Mr Moreman said: “We’re in this ironic situation where we’re delivering services on behalf of the NHS and local authorities, yet our costs are rising to fund those same services. 

“Our partners are telling us there’s no additional money to cover these increases.

“The reality for us is that additional costs in mental health services mean fewer young people get counselling and increased costs for housing mean fewer beds available for young people who would otherwise be homeless.”

Mr Moreman described the situation as “somewhere between ironic and rage-inducing”.

Before Christmas, a national letter from the charity sector was sent to the Chancellor, urging reconsideration. However, the Treasury's response made it clear that there would be no change in the decision.

Mr Moreman linked up with 10 charities across Devon, Cornwall, Gloucestershire and Somerset to assess the wider impact of the added financial burden.

On average, he said, each charity was making one person redundant and supporting 100 fewer young people. This equated to 10 redundancies across the group and more than 1,000 young people left without the same support.

Mr Moreman said: “The effect is small but significant, particularly given that the need is just going through the roof. We help twice as many young people now as we did five years ago and are still not meeting the demand knocking on our door.”

He believes that those 1,000 young people — many struggling with mental health issues, he says — will now turn to GPs, A&E or miss school, with the public sector ultimately paying far more per person than it would have if charities had been able to provide early intervention.

The charity said that beyond financial costs, these young people will also face greater trauma and disruption due to the lack of support.

Mr Moreman and the coalition of charities have now written directly to Mrs Reeves, urging the government to create a short-term financial support fund for charities.

He said: “This is a relatively short-term issue of two or three years. As new funding reaches local authorities and the NHS, that money will reappear. But we are locked into grant and contract agreements now for next year and the year after.

“So we’ve asked: can the government provide a fund to charities like ours to help us get through the next couple of years?”

Young Devon and the nine other charities that supported the letter are awaiting a response.

Young Devon said that despite these financial pressures, it remains committed to changing young people’s lives for the better.

The charity said: “The important thing is that we’re making a difference. Last year, we supported over 4,500 young people across the county, and we’re now opening 51 new flats in Plymouth for homeless young people.”

But Mr Moreman conceded: “I’d like to be doing less. I’d like fewer young people to come to us saying they have nowhere to live or that they can’t get through the day because of their mental health concerns.

“The fact that Young Devon even does the things it does is at once beautiful and a terrible indictment of the society we live in.”