John Swinney has called on the UK government to cover National Insurance increases for Scottish charities, GPs, social care providers and universities.

The first minister said Tax increase announced in the Autumn Budget It had caused “nationwide alarm”.

His request comes in addition to the £500 million the Scottish government estimates it will cost public sector employers to cover extra staff costs.

The Treasury has pledged to provide extra funding to help devolved administrations cope with public sector costs and said its tax regime for charities was “among the most generous anywhere in the world”.

Although third sector groups are often employed by local authorities to deliver public services, they are not currently expected to be paid back the higher National Insurance contributions under Labour’s plans.

Doctors, care facilities and higher education institutions have warned that cost increases could lead to closures.

Speaking at the Social Enterprise Scotland conference in Edinburgh, Swinney warned that the tax increase could have “devastating consequences for frontline services”.

“It is completely unacceptable that our third sector is being penalized as a result of the Chancellor’s decisions,” he said.

“The UK Budget should not be balanced on the backs of Scotland’s charities.

“The Chancellor clearly did not foresee the extent of the problems his decisions would cause when he published his Budget; The panic and confusion that has spread from the Treasury since then makes this clear.

“But there is still time for the UK government to do the right thing and fully cover these costs.”

Employers currently pay a 13.8% charge on employees’ earnings above the £9,100 annual threshold.

In the Budget, Chancellor Rachel Reeves said the rate would rise to 15% in April 2025 and the threshold would be reduced to £5,000.

To help the smallest businesses, the employment allowance, which allows companies to reduce their National Insurance liability, will increase from £5,000 to £10,500.

But some organizations in Scotland have warned that the changes could put their members under serious pressure.

Doctor representatives said that extra staff costs will be thousands of lira may close some practices.

Scottish Voluntary Council estimate It is stated that the National Insurance increase will cost £75 million for the sector, which employs 133,000 people, 5% of the country’s workforce.

He said voluntary organizations “cannot handle the additional financial pressures”, adding: “Many have already had to support public services with their own funds, and we are hearing of an increasing number of organizations being forced to close their doors.”

The Coalition of Care and Support Providers in Scotland said: News of the tax increase had caused “panic” and would be a “catastrophe” for its members unless compensation or exemptions were provided.

Universities Scotland National Insurance increase expected, says It will cost higher education institutions approximately £30 million.

In a statement this week he added: “Despite the long-term decline in funding, rising costs of this scale cannot be met without a solution commensurate with the challenges we face for Scotland’s universities.”

The Scottish government will announce its budget for the next financial year on 4 December.

The UK government is yet to confirm how much compensation devolved administrations will receive to cover costs for public sector employers, in addition to the £3.4bn of additional funding announced in the autumn budget.

A spokesman said further details would be released “in due course”.

The Treasury said the autumn Budget provided just over £6 billion in tax relief for charities and their donors for the tax year to April 2024.

A spokesman added: “The Government will protect the smallest businesses by increasing Employment Allowance to £10,500, meaning 865,000 employers will pay no NIC next year.”