The National Churches Trust (NCT) has said that many churches are facing financial hardship thanks to the Starmer government’s decision to cut funding for historic places of worship and remove a VAT exemption that goes back to Gordon Brown’s time as Chancellor.
The Listed Places of Worship Grant Scheme was first established in 2001 and gave historic churches and exemption from paying VAT on repairs. Initially intended as an interim measure, the scheme has essentially been renewed by every government since then – until now.
The scheme is due to come to an end on 31 March, however the NCT said that churches are already feeling the pinch because the budget has now run out.
The scheme’s budget was previously set at £42 million, however this was almost halved by Starmer’s government to £23 million, all of which has now been used up.
The Listed Places of Worship Grant Scheme is set to be replaced by the Places of Worship Renewal Fund. When the new scheme was announced the Church of England welcomed the clarity of what would replace the old scheme, but warned the changes could mean “added pressure on local fundraisers and inevitably a drain on other sources of funding”.
The NCT has said that with the new scheme not yet up and running, many churches have no idea what support they can reasonably expect to receive from the government.
The group added its concerns that the new scheme will operate at the same reduced budget as the old one and is also subject to tax.
Sir Philip Rutnam, Chair of the NCT, said the money running out in the Listed Places of Worship Grant Scheme before the scheme is set to end “leaves potentially hundreds of churches in the lurch”.
“Today, 21,000 historic places of worship, the vast majority churches, will start bearing the cost of new taxes,” he said.
“After 25 successful years, the government has removed a lifeline for churches which was introduced by a Labour Chancellor in 2001, allowing them to reclaim VAT on repairs.
“With 1000s of churches at risk, this is yet another blow to our national heritage as many will now be unable to pay for urgent repairs.”
