The recent increases in employer National Insurance Contributions (NICs) and the National Living Wage, as outlined in the UK Government’s budget, are creating a financial storm for organisations providing essential support to Disabled people. Projections suggest that these measures will cost the sector a staggering £266 million in additional expenses by 2025.
For Disabled People’s Organisations (DPOs) and disability service providers, these additional costs translate into severe challenges that threaten their sustainability and, crucially, the well-being of the people they support. The Voluntary Organisations Disability Group (VODG) estimates that more than 60% of disability charities expect to be in financial deficit as early as March 2025. A third of these organisations anticipate handing back statutory contracts to local authorities, which would disrupt critical services such as residential care and at-home support. This threatens Disabled people’s access to independent living, leaving many without the life-saving services they rely on.
Staffing is also under threat, with 24% of organisations predicting staff cuts and 18% considering pay freezes or reductions. These measures will erode the quality of support for Disabled people, exacerbating an already strained sector. Mencap has highlighted that approximately 60 services are at risk of closure, directly impacting people with learning disabilities and other support needs. Despite the government pledging £680 million for social care, the sector estimates it needs closer to £2.8 billion annually to meet rising costs.
These financial pressures are compounding existing challenges for DPOs. The cost-of-living crisis has driven up demand for disability-related benefits, Direct Payments support, and wider services. DPOs, despite their resilience and ability to innovate, now face significant challenges in maintaining essential support for their communities.
DPOs are uniquely positioned to deliver services like Direct Payments support because they operate under the Social Model of Disability. As organisations led by and for Disabled people, DPOs bring lived experience to their work, ensuring that services are person-centred, accessible, and empowering. Unlike other providers, DPOs prioritise independence, choice, and control for Disabled people, promoting self-advocacy and co-producing solutions with the people they serve.
However, rising NICs and soaring wage costs are threatening the sustainability of DPOs. Restricted statutory funding leaves little room to absorb these additional costs, forcing some organisations to consider drastic measures such as cutting services or handing back contracts. Without urgent action—such as exemptions for charities or protected funding—these pressures risk dismantling the very services that enable Disabled people to live independently and with dignity.
If DPOs cannot continue to deliver these essential services, Disabled people will face a loss of trust, representation, and expertise. Non-DPO providers may lack the understanding and commitment to uphold the rights-based, community-led support that Disabled people need and deserve. The unique role of DPOs must therefore be protected to ensure Disabled people’s independence, equality, and access to life-changing support.
