A councillor has revealed the stark reality facing the third sector which means that staff supporting homeless people have been forced to use foodbanks due to financial pressures. It is feared that the situation could become even worse if their employers are not supported to deal with their increased National Insurance contributions.
Support for the homeless is provided by councils in collaboration with housing charities, known as the “third sector”, which are neither public bodies or private companies. These partnerships are sustained through funding from the Welsh Government’s Housing Support Grant.
Torfaen Borough Council benefits from a £4.6 million annual allocation of this grant, and also incorporated the Homelessness Prevention Grant this year, boosting the budget to £5.7m. The increased funding is aimed at supporting the Welsh Government’s commitment to equitable working conditions and promoting service sustainability.
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The council distributes this money to housing charities and third sector organisations for service provision and staffing, as well as for its internal operations and training efforts. However, Councillor David Daniels, Torfaen’s cabinet member responsible for housing, said he fears the toll rising employer National Insurance contributions detailed in the UK government’s October budget may have on these organisations, especially as it is uncertain whether the rise will be funded for council contractors.
During the cabinet meeting on Tuesday, December 3, it was reported that the upcoming modifications to National Insurance could impose an estimated cost of around £2.5m on Torfaen for the next fiscal year. Robert Green, the council’s head of financial services, expressed confidence that the central government would cover the costs.
However, he warned that the situation is less clear regarding third-party services, with ongoing discussions between the Welsh and UK governments potentially yielding more information in the new financial year. For the latest Welsh news delivered to your inbox sign up to our newsletter
Cllr Daniels raised concerns that any additional could hit groups the council works on with homelessness and housing support hard. He said: “That National Insurance increase is a significant concern. We will be waiting like many other councils, and charities, and looking for intervention from the UK government on what the impact is on those support services.”
The Labour councillor said support services haven’t been able to offer sufficient salaries and added: “They have been facing very uncertain circumstances and some staff from those providers have had to rely on support services, like food banks, themselves.”