A report to the Church of Scotland's General Assembly in May will sound the alarm over Scottish Executive plans to stop water charge exemptions for charities which could leave hundreds of congregations short in the pocket.

Under current legislation, Church of Scotland congregations benefit from the current exemptions to charges on non-domestic water and sewerage services granted to charitable organisations. This exemption scheme has been in place since 2001 but now the Executive is consulting on a proposal that would see the exemption scrapped after 2010 if it gets the go ahead.

The report from the General Trustees will warn the General Assembly, "If the exemption is removed in 2010 then most congregations (although low users) will face very substantial costs partly due to the high level of the standing charge element of the arrangements and partly due to the relatively large roof areas of churches and halls."

Congregational treasurers have already been made aware of the possibility of charges in an alert sent out by the Church's solicitor in January.

The General Trustees have now written to all MSPs to gauge the level of support for a continuation of the exemption scheme.

"The Trustees' view is that it is impossible to exaggerate the potentially negative impact that these plans could have on congregational finances," the Church of Scotland said.

"This is not solely a matter for churches. The Scottish Council for Voluntary Organisations is also deeply concerned about the impact which the changes will have on the charitable sector," it added.

The Trustees' Central Fabric Fund provides financial assistance to congregations towards the cost of repairs and improvements to their buildings. According to their report to the General Assembly, loans totalling £8,905,002 had been committed to congregations out of a capital of £11,089,484 by the end of 2006. In addition, the Trustees also made available from the fund grants totalling £1,243,186 during the year, of which £337,320 was allocated in the form of priority grants.

The Trustees have for some time been concerned that the present Act anent Care of Ecclesiastical Properties passed in 1979 and its subsequent amendments impose too great a burden on Presbyteries. To address this problem, the Trustees will put forward proposals to simplify the legislation at this year's Assembly.

The report concludes with a warning to the General Assembly that the lack of a coherent overall strategy by the Church as a whole in respect of surplus and redundant buildings runs the risk of inappropriate decisions being made by the Assembly, the Trustees, Presbyteries and congregations.