New Chancellor’s first budget fails to deliver for charities

Chancellor of the Exchequer John Healey has delivered his first budget since taking over from Rachel Reeves in July this year.

While the budget included measures to reduce the cost-of-living, it lacked decisive action to protect charities supporting the most vulnerable in society. Community-based health and social care organisations, such as local Headway charities delivering rehabilitation and support on behalf of local authorities, need urgent help and yet their pleas have again been ignored.

Financial pressures remain unaddressed

The new Chancellor made no changes to employer National Insurance Contributions, which increased from 13.8% to 15% last year, adding significantly to the costs faced by Headway charities.

Our network of charities provides vital rehabilitation and support for brain injury survivors, saving the public purse significant sums each year. Yet almost 10% have closed in just three years, with others cutting back amid severe financial pressures.

Maintaining the 15% rate risks pushing more services to the brink as costs continue to rise.

Over the summer, we wrote to the new Chancellor urging him to reverse the increase in employer National Insurance contributions. We argued this would give charities the financial breathing space they need to support brain injury survivors, while helping to save government money, but we have yet to receive a response.

Reacting to the budget, Headway UK’s CEO Luke Griggs said:

“We welcomed the Prime Minister’s public recognition of the vital contribution of charities, including his emphasis on co-designing and co-delivering community services.

“Charities are facing unprecedented pressure, and this budget was an opportunity to provide some respite and encouragement to a sector in urgent need of support.

“We are therefore left underwhelmed and frustrated by today’s budget.

“While many of the Chancellor’s cost-of-living measures will be welcome to those affected by brain injury, local Headway charities needed decisive action too. This Budget falls short in delivering that.

“Many Headway charities are being squeezed by fierce competition for grants, chronic ICB underfunding and relentless cost-of-living pressures. Failing to reverse the increase in employer National Insurance Contributions risks piling further pressure on vital community-based brain injury services.

“Reducing these costs would help protect vital services and invest in the futures of the people they support.

“We expected and hope for better.”

National Care Service

Chancellor John Healey also provided some financial details on the government’s plans to adjust the State Pension Triple Lock to help fund Prime Minister Andy Burnham’s proposed National Care Service. Announced in September, the service is due to be established in the next parliament to provide free personal care for older people in England.

The Chancellor said the changes to the Triple Lock, due to take effect from April 2030, would save “£15bn a year by the end of the 2030s” and “£50bn by 2050”. Under the adjusted Triple Lock, the State Pension will keep pace with average earnings over time, rather than consistently rising faster than wages.

The proposed National Care Service is planned to provide free personal care for older people in England, with details still to established. Scotland has provided free personal care since 2002, with eligibility expanded in 2019 to adults of all ages who are assessed as needing it.

Upcoming welfare changes

The new Chancellor also took the opportunity to provide much-needed clarity on timelines relating to welfare changes. He said that the Timms review on Personal Independence Payments will be published next month.

A white paper will follow in 2027, with the Chancellor saying there would be a rejection of “crude cuts”.

Headway UK previously submitted evidence to the review and will be monitoring these publications, assessing what they mean for brain injury survivors.