Historic churches are feeling the pinch after the UK government reduced funding for the Listed Places of Worship (LPW) Grant Scheme, a programme that allows religious buildings to reclaim VAT on repair and maintenance work.
Chancellor Rachel Reeves cut the scheme's annual budget from £43 million to £23 million, and imposed a new £25,000 limit per claimant.
The LPW scheme, in place since 2001, has provided financial support for the upkeep of listed religious buildings, many of which are centuries old and extremely costly to repair and maintain.
The change comes as parishes across England face rising costs for conservation work, often relying on volunteers and small congregations for funding.
In Newark, Nottinghamshire, the Grade-I listed St Mary Magdalene church had begun a £4.5 million renovation project with the expectation of reclaiming a significant portion of costs under the scheme.
The reduction in available funding has left the parish with a shortfall of approximately £600,000, requiring a curtailment of planned works and reliance on grants such as those from the National Lottery Heritage Fund, the Daily Express reports.
“It felt like the rug had been pulled out from under us,” 74-year-old Andrew, who is in charge of St Mary’s renovation, told the newspaper.
Similar challenges are being reported nationwide.
In Fovant, Wiltshire, volunteers recently raised £19,000 for organ repairs but now face additional expenses for structural issues. Church supporter Felicity Pinder, 85, shed light on the challenges by telling the Express it was harder to fundraise for essential repairs like a leak in the roof because it was "less attractive" than a 100-year-old organ.
In Bowerchalke, Hampshire, warden Peter Guy said the previous year’s VAT relief on a £40,000 project had been critical to keeping the church operational. He fears more rural churches will be forced to close.
In Kington St Michael, Chippenham, a small group of parishioners - mostly pensioners - must cover repair, utility, and parish share costs. Fundraising activities like organ concerts have become essential to cover major expenses.
The head of fundraising and public affairs for National Churches Trust, Ben Sims, reports increased demand for grants, calling the situation a “heritage disaster” and urging a long-term funding strategy involving government, church bodies, and private donors.
He said that churches have to deal with "a lot of bureaucracy", but that people sometimes lack awareness about the funding that is available.
The Church of England has been lobbying for the LPW scheme to be made permanent and for the cap on claims to be lifted.
Last month, the Culture, Media and Sport Select Committee heard evidence from the Church of England’s Director for Cathedral and Church Buildings, Emily Gee, and a former Director for Cathedral and Church Buildings, the Rev Paula Griffiths, who called the LPW scheme a "lifeline" for historic churches.
They warned that historic churches "urgently need" ongoing funding, and that the uncertainty around the LPW scheme is putting them "under real pressure", forcing them to do additional fundraising or scale back plans.
A spokesperson for the Department for Culture, Media and Sports told the Express: “Listed places of worship are important to faith communities and provide a range of services to the wider public. Many of them are architecturally and historically significant.
“Alongside other funding available for listed places of worship via DCMS and our arm's length bodies, such as £100 million provided by the National Lottery Heritage Fund between 2023 and 2026, the Listed Places of Worship Grant Scheme aims to enable religious organisations to claim grants covering eligible VAT costs paid towards repairs and renovations.”
