VAT, listed buildings and the heritage of the Olympics.

The campaign to see VAT refunded for work on Listed buildings owned by charities is gathering pace. The Princes Regeneration Trust has just published a report by the New Economics Foundation proposing VAT relief for work on listed buildings owned by charities and those found in the most deprived neighbourhoods.

Heritage Link has also been campaigning for VAT relief and to quote their assessment of the situation is informative, so lets quote it in full:

What is particularly interesting about the PRT proposal is the financial assessment behind it. Value Added: the economic, social and environmental benefits of creating incentives for the repair, maintenance and re-use of historic buildings sets out new research, existing studies and a full cost benefit analysis.

It calculates that the scheme in the first year of operation would cost £1.3m rising to a maximum of £48m in the tenth year but that the social, economic and local economic benefits created would mean that within four years, the scheme would deliver a net and growing benefit to the Treasury. These figures do not include the less measurable benefits of increasing social capital through empowering local residents to improve their areas and strengthening the social cohesiveness of communities.

The figures on comparative environmental costs are staggering. ‘Taking local important historic building from the brink of demolition by putting incentives on reuse and refurbishment’ would, nef calculates, save 490 tonnes of carbon per year. The report puts carbon emissions resulting from demolition and rebuild compared with refurbishment and re-use as seventy times greater.

The report rehearses the well known ‘perverse incentives’ of the current Vat regime: it provokes more change in historic buildings than is necessary; it discriminates against small volunteer-led charities like Building Preservation Trusts, thus discouraging participation at community level because of added complexity and wasted volunteer time and effort. Higher VAT dilutes the effectiveness of existing public investment in the historic environment; it encourages the neglect of community assets, often leading to the loss of historically important local buildings; and finally it undermines environmental sustainability by making small repairs and re-use proportionately more expensive than energy intensive and wasteful major works, demolition or new build. The full report will shortly be on the Trust’s website and on Heritage Link’s www.heritagelink.org.uk

Whilst the report was very positively received by the Treasury and DCMS, its proposals were not adopted in the budget. Heritage Link is now working with the Prince’s Regeneration Trust and DCMS who are jointly undertaking further work to see if an agreed proposal could go forward from those in the heritage world which would meet the wish expressed by the Chancellor in his budget speech ‘And in the run up to the Spending Review, the Culture Secretary and I will examine the help we can give to churches and heritage buildings that are at the heart of so many communities’

Clearly the Olympics puts the government under some pressure and that last senetence suggests the campaign may be pushing on an open door. Meanwhile The Heritage Lottery Fund has also announced how it will handle a further cut in funding as a result of 2012.

We now expect to manage the reduction in our budgets over a longer period – the known lifetime of HLF through to 2019. This means we can avoid sudden peaks and troughs in our funding and will still distribute an awards budget of £180million pa between 2009 and 2012