Cancer charity hit with 'devastating' £250k tax hike

A leading Welsh charity has warned it will have to pay an extra £250,000 a year towards increased National Insurance contributions.

Writing to the Senedd's Finance Committee, cancer care charity Tenovus called the rise "devastating" and urged UK ministers to reconsider or for Welsh ministers to mitigate the impact.

In separate evidence the Welsh Local Government Association warned councils' 2025-26 funding gap was "equivalent to a 26% council tax increase, or the loss of just over 14,000 posts".

Charities, council leaders, financial experts and ministers appear before committees on Wednesday to discuss the Welsh government's draft budget.

Labour ministers must strike a deal with one of the other political parties for the budget to pass.

Published in December, it allocated an extra £600m a year for the NHS as part of £1.5bn additional funding for public services.

Councils have warned of the threat of bankruptcy and cuts to services despite a £253m cash boost in the budget – less than half what they say they needed.

The increases in National Insurance (NI) contributions for public sector employers are expected to be covered by extra UK government cash, but there have been concerns some of the public sector spending increases will be "gobbled up" by NI.

Tenovus said it provides "counselling, nurse-led support and benefits advice... free of charge, exclusively to the NHS".

In her letter, chief executive Judi Rhys wrote of the "devastating impact" of the rise in, estimating it to cost £250,000a year "at a minimum".

She added: "While we absolutely want to pay our staff fairly and anticipated the living wage increases, the scale of this NIC rise is unsustainable in the context of a challenging fundraising environment."

The UK government is expected to provide funding for Welsh ministers to mitigate the rise in NI, but the money is only expected to cover workers directly employed by the public sector.

Private companies, charities or organisations that provide services for public sector bodies are not likely to get help.

The WLGA estimates the funding gap across Wales' 22 councils in 2025-26 will be £563m.

It quoted one council as saying that "asking schools to simply provide education to the same number of pupils is ever more difficult because the only real option available is to reduce teacher numbers and increase class sizes".

In separate evidence the Welsh Council for Voluntary Action described "an alarming direction of travel" set out by the Welsh government's 2024-25 budget.

It said voluntary groups were "expected to deliver and prop-up frontline services without being involved in decision making or having sufficient resources to operate".

It said this uncertainty, combined with inflation, meant people were "leaving in pursuit of more competitive pay and job security".

Ministers are still trying to strike a deal to pass the budget in a Senedd vote in March - Labour needs an agreement with one other party as it does not have a majority of seats.

Plaid Cymru leader Rhun ap Iorwerth suggested on Tuesday that his party would sit down with ministers if they were to "talk seriously" about securing more than £4bn of consequential funding for Wales as a result of HS2 being built in England.

This move would be in the hands of the UK government, as would Plaid demands for the devolution of the Crown Estate and reform to Wales' funding formula.

Prime Minister Sir Keir Starmer has previously made it clear that there will be no consequential HS2 funding.

Welsh ministers may instead try to tempt sole Liberal Democrat Jane Dodds, who has spoken about the need for more money to be spent on childcare and social care.

A deal with the Welsh Conservatives has been ruled out.