The government has agreed to provide churches with £30m extra in response to a campaign over VAT.

The Rev John Naude was one of those in our diocese concerned that new VAT rules might hit plans for better disabled access for our cathedral

Worshippers from our diocese were among those complaining after the Chancellor unexpectedly imposed VAT on alterations to listed building. See here for our concerns.

But the Church of England has welcomed today's agreement with the government over the future funding of alterations and repairs to its 12,500 listed buildings. The £30 million a year extra money comes on top of the £12 million already in the Listed Places of Worship Grant Scheme (LPWGS).

The Bishop of London described this as an acknowledgment from Government of the unique heritage value to the nation of cathedrals and churches and the way in which these alterations are enabling them to serve their local communities in a range of ways alongside being centres of worship.

Despite not persuading the Government that maintaining zero rated VAT for alterations is the best way forward, church leaders today said that the £30 million a year extra money that the Chancellor has committed to the LPWGS will enable the equivalent to the VAT bill to be paid out on all alterations and repairs to listed church buildings.  The Scheme pays out to those denominations and faiths with listed buildings

The LPWGS will in future be ring fenced and no longer vulnerable to cuts in departmental budgets and it is planned to re-introduce monthly pay outs from October. The scheme will be guaranteed for the duration of this Parliament. Parishes have shown they need a much greater degree of certainty in the funding they receive and this will now be met by ironing out some of the more unhelpful characteristics of the current LPWGS.

The Bishop of London, the Rt Rev Richard Chartres, who chairs the Cathedrals and Church Buildings Division and who led the discussions with the Treasury said “We owe a debt of gratitude to the Second Church Estates Commissioner Tony Baldry, for his role in brokering this agreement, and to Anne Sloman, and Janet Gough  who have worked tirelessly in a very short window of opportunity but the Chancellor made it very clear that he was moving to ease the impact on the churches in recognition of the massive contribution made by congregations up and down the land to the life of their communities”.

Anne Sloman, Chair of the Church Buildings Council said, “the fact that the Treasury offer went from £5million to £30million is a recognition of the tremendous value for money to the nation as a whole that our buildings represent. We are grateful to parishes up and down the land who have lobbied so hard since the Budget to bring this point home to the government, and even more grateful for the massive contribution volunteers make by their efforts, week in and week out, to keep our beautiful churches in good repair for worship and adapted to serve the community in so many creative ways.”

For more details, including a question-and-answer analysis for parishes, click here.