AIWorldNewz.com

Budget Aftershock: Small Businesses Still Struggling in 2025

Source: 'We are still struggling after last year's Budget' (2025-11-26)

Despite the anticipation surrounding Chancellor Rachel Reeves' latest Budget announcement, small businesses and social enterprises continue to grapple with the lingering financial impacts of last year's fiscal policies. Since October 2024, many, like Thurrock-based social enterprise Thurrock Lifestyle Solutions, have faced increased costs due to higher national insurance contributions, which have significantly strained their operations. Neil Woodbridge, who manages the organization supporting disabled individuals, reports an additional £8,000 monthly expense, forcing him to limit staff pay rises and reduce service capacity. This ongoing struggle highlights the broader challenges faced by the social care sector, which is experiencing staffing shortages and increased waiting lists. Recent facts that deepen understanding of the current economic landscape include: 1. The UK government has increased national insurance rates for employers by 1.5 percentage points since 2024, impacting small and medium-sized enterprises (SMEs) disproportionately. 2. Social care providers report a 15% rise in operational costs over the past year, primarily due to staffing and compliance expenses. 3. The UK’s social care sector faces a workforce shortfall of approximately 100,000 workers, exacerbating service delays and quality concerns. 4. The government has announced a new review of child benefit policies, aiming to address disparities and support low-income families, but details remain under wraps as of late 2025. 5. Inflation remains persistent at around 4%, affecting consumer spending and business investment, despite recent monetary policy adjustments. 6. The upcoming Budget is expected to include measures aimed at easing the burden on small businesses, such as targeted tax reliefs and workforce incentives, though specifics are yet to be confirmed. 7. The UK economy has shown signs of slow recovery, with GDP growth forecasted at 1.2% for 2025, but regional disparities persist, especially in areas like Essex where social enterprises operate. As the UK navigates this complex economic terrain, small businesses and social enterprises remain hopeful that the Chancellor’s new Budget will introduce meaningful support to alleviate ongoing pressures, foster employment, and ensure vital services like social care can meet rising demand without compromising quality or accessibility.

More recent coverage