On 30th October the Chancellor, Rachel Reeves published the Budget 2024.
While we welcome the announcement that an additional £1.5 billion will come to Northern Ireland from April 2025, there is yet to be any confirmation of how this may assist with sport in Northern Ireland. With many conflicting demands, there must be allowance for sport and recreation to gain after years of reducing Exchequer spend.
Below is a brief summary of some key points that may impact on the sector going forward.
Budget overview/ key points
- The NI Executive will receive an additional £1.5 billion through the Barnett formula in 2025-26.
- The minimum wage rates, including the National Minimum Wage and National Living Wage, will increase from 1 April 2025 from at least 6.7% (dependent on age/ tiers)
- Employer National Insurance Contributions (NICs) will increase by 1.2%, to 15% from 6 April 2025.
- The Threshold (Secondary threshold) at which employers become liable to pay national insurance on each employee’s salary – will reduce from £9,100 per year to £5,000 per year.
- The Employment Allowance will also be increased from £5,000 to £10,500 and the £100,000 threshold will be removed.
- The basic state pension (for those who reached the state pension age before April 2026) and the new state pension (for those who reached the state pension age after April 2026) will increase by 4.1% in 2025-26.
Current Sports Budget Situation
- The reality for NI budgets is that the Dept for Communities only saw an increase of 1.6% in 2024 (a real term cut) .
- There was a ‘standstill’ budget for SportNI and a significant cut in capital funding with now only a reported £0.5m budget.
- The Sport and Recreation Sector in Northern Ireland has faced ongoing cuts from the Exchequer since 2014, with Exchequer Investment into SportNI (including Capital) is now reported at c. £7m, compared to an average of c. £14m in 2012-2016 ( a real term cut of 50%).
Implications
The announcement in the recent budget will have mixed implications for sport/ recreation organisations (including clubs) with the risk of increased costs to meet the additional NIC Contributions and pension costs. A number of reports suggest that smaller staffed organisations may see some overall reductions in NIC costs with the increased employment allowance. However, the more employees an organisation has, the increased overall costs will be associated with NIC contributions, once that allowance is depleted.
Many sport and recreation organisations are not for profit and often have limited income and resources. For the likes of Governing Bodies, sports clubs or those in receipt of public funding, allocations are usually made in the absence of inflationary costs or constraints. In the view of this policy carrying through, it will be imperative that funders recognise the potential increased costs going forward and will need to take this into consideration of budgets from 2025 onwards.