MPs have criticised a failure by government to exempt charities from increases to employers' national insurance contributions.

The increases were announced in last year’s Autumn Budget but MPs from have raised concerns of their impact on an already cash-strapped charity sector.

In a debate this month in parliament a failure to exempt charities has been branded as “ludicrous”.

Concerns have been raised from MPs from a range of parties, including Conservative, Liberal Democrat and Labour.

“Is it not absolutely ludicrous that money given for charitable purposes should effectively be siphoned off to the Treasury instead of being used to provide the support to children and their families for which it is intended?”, asked Herne Bay and Sandwich’s Conservative MP Roger Gale.

Conservative Joe Robertson, who represents the Isle of Wight and launched the debate, agreed with Gale adding: “This is charitable money—most of it is charitable donations—that is given to charities to provide valuable work, and the Treasury is taking it and putting it into the Government’s coffers.

“Some of these charities, such as those in my right hon. friend’s constituency, are small charities doing valuable work and are the least able to afford to give money over to the national Government.”

He cited NCVO estimates that charities face additional costs of £1.4bn to meet the increases.

The cost to end of life care charity Marie Curie and the hospice sector, are among examples Robertson singles out.

He said: “The change will cost Marie Curie almost £3 million a year, and it says that without further support critical services for the terminally ill may be scaled back.

“Hospices throughout the country will pay between £30 million and £50 million a year.”

Meanwhile, Liberal Democrat MP for Glastonbury and Somerton Sarah Dyke is also concerned about the impact of the hike on charities in her constituency.

She cited the example of Wincanton, Somerset, based mental health support charity The Balsam Centre during the debate.

“The NI changes mean that it will have to find an extra £40,000 for its salary costs next year, cancel any pay increases and operate at a reduced capacity from April.

“Its work relieves pressure on the NHS and on local government.”

Abtisam Mohamed, Labour’s MP for Sheffield Central said she is also “concerned about the impact of the national insurance increase on organisations”.

However, she called into question Conservative Party MPs' sympathy for the financial plight of charities.

“Although it is nice that today the Conservatives care about charities, that was not the case previously,” said Mohamed, who is the former chief executive of a community regeneration organisation.

“The cuts started right at the beginning of the Conservatives’ time in office, with their “big society” policy, which in my experience was just an underhand means of implementing cuts.

“I know that because, like many organisations, the charity that I worked for spent year after year managing cuts after cuts. Vital local community services were forced to close or to reduce in size.”

MPs including Lib Dem leader Ed Davey and Green Party leaders Carla Denya and Adrian Ramsay introduced amendments to the government’s national insurance contributions bill in December which would have reduced the impact of the rises on charities.

But these were not backed by most MPs and the bill was passed at its third reading stage.

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