Leaders of the largest 100 charities in the UK have reported making cutbacks in the past year as they face financial uncertainty in a tough economic climate.
In response to the Charity Chief Executives Survey 2025, published this week in Charity Finance, many CEOs said they have had to make difficult financial decisions in the past 12 months, including laying off staff.
Respondents expressed concerns about the impact of higher employer national insurance contributions (NICs) and a reduction in the secondary threshold on their charities and their abilities to foot the bill.
Tough operating environment
The biennial survey profiles leaders at the top 100 UK charities and gathers their views on the current economic and political environment.
In this year’s survey, Owen Sharp, CEO of Dogs Trust, said: “Like many organisations in the charity sector, we’re dealing with significant financial uncertainty because of the challenging economic climate.
“The rising costs of everyday essentials, including energy, veterinary costs and the supplies needed for the dogs in our care, have put significant additional strain on our budget.
“The current economic environment impacts us on several fronts. The cost of running the charity is higher and we must work harder to raise the required funds.”
Sam Monaghan, CEO of MHA, said his charity has had to sell some of its care homes and closed three during the past year.
“In addition, we’ve announced plans to sell a number of our retirement living schemes and withdrawn from providing care at eight schemes,” he said.
“These decisions aren’t just financial, although this has fed into the decision-making process.
“They’re also due to a strategic review of MHA’s services, making sure that all align with our future vision for the charity and also ensuring we’re financially sustainable.”
Stephen Veevers, CEO of Hft, said his charity has closed three services, “ending support to nearly 50 beneficiaries and with approximately 30 colleagues being made redundant”, while Sustrans’s CEO Xavier Brice said his charity is currently restructuring and shrinking by 20-25%.
Meanwhile, the Consumers’ Association, better known as Which?, has made cutbacks partly due to investment in technological and digital service upgrades, according to CEO Anabel Hoult.
“Reflecting these investments and the changing ways in which people are choosing to interact with Which?, we’ve unfortunately had to undertake some necessary restructuring, which resulted in 26 redundancies last year”, Hoult said.
NICs changes increase costs
In her budget, chancellor Rachel Reeves announced that from April, employer NICs would increase from 13.8% to 15% while the secondary threshold would fall from £9,100 to £5,000.
Responding to the survey, Mencap’s CEO Jon Sparkes said the threshold changes “will add £5.2m to our wages bill and mean that we’ll have to ask local authorities for a 9% increase which we know most won’t be able to pay”.
“Unless the government finds a way to make more funding available, we may have to give notice on up to 60 of our services which would have a huge impact on employees and people we support,” he said.
Sharp estimated that the increase in employer NICs will cost Dogs Trust around £1.5m annually.
“As we don’t receive any government support, we’ll need to make up this shortfall from the donations we receive from our generous supporters,” he said.
Richard Parry, outgoing CEO of the Canal & River Trust, predicted that the changes would mean an extra £1.6m per annum of unbudgeted cost for his charity.
“On top of other increased costs, this will impact our ability to achieve our charitable objectives,” he said.
RSPCA’s interim CEO Shān Nicholas said the changes “could cost us more than £1m in 2025 alone”.
“Failure to provide exemptions or allowances for charities when implementing these employer NICs hikes risks placing additional pressure on what is already a challenging financial backdrop,” she said.
Meanwhile, Hoult of Which? said: “The increase is the equivalent of a 2.3% hike in salary costs and as a result, we’ll have to work very hard to ensure that we can balance this against our vital work for consumers.”
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