Advocating for the future of churches

In January 2025, the UK Government announced that the Listed Places of Worship Grant Scheme has been renewed for one year with a reduced budget. The scheme allows for places of worship (across all faiths) to reclaim VAT on their repair and maintenance projects and, until now, it has been renewed by every UK Government since it was established in 2004. The scheme has supported over 13,000 places of worship in this time.

However, at a Westminster Hall debate in January, there was an announcement made on the future of the scheme:

• The Listed Places of Worship Grant Scheme will be extended by one year to March 2026.
• A claims cap of £25,000 will now apply, impacting larger projects.
• The overall budget of the scheme has been reduced from £29 million to £23 million.

Whilst news that the scheme has been extended comes as some relief, the introduction of the £25,000 cap, and the uncertainty beyond March 2026, are both deeply concerning. If the scheme was discontinued, there would be a 20% increase in project costs for places of worship, many of which are already struggling to keep their doors open. The ripple effect of potential closures goes further than the buildings themselves, it will have a massive impact on the communities they serve. 

Churches are more than just buildings, they are vibrant communities supporting people of all faiths and none, providing a huge range of community services such as foodbanks and mental health support. According to the National Churches Trust, churches contribute £55 billion of social value to the UK, yet the work of churches in addressing social need is often undervalued and unrecognised. 

It is already extremely challenging for churches to meet community demand and generate enough income to maintain their buildings, which is why the Listed Places of Worship Grant Scheme is vital.

An example of a project that is now in jeopardy is St John’s Chatham in Kent, a stunning Waterloo Church, located in the heart of Chatham…

St John’s was consecrated in 1821 but closed in 1997. Thanks to the support of numerous partners the building reopened in 2021, attracting 1,500 visitors in the first nine months alone, following the addition of a small kitchen and a disabled access loo. Despite the poor state of the church, the congregation has grown with over 200 people a week attending while the surrounding area also underwent regeneration. The church is now in the midst of a major regeneration project, with thanks to support from the National Lottery Heritage Fund, members of the Christian Funders’ Forum and other funders. The development will see the reopening of a previously closed church following the complete restoration of the building, the addition of a lift, the creation of a concert venue and new working spaces for up to 10 small businesses creating a community hub. The newly imposed Listed Places of Worship Grant Scheme cap will now leave this project £100,000 short of its funding target, and at a critical stage in its delivery. The Church will now have to cut vital elements from its project or find alternative funding sources which are already exhausted.

St John’s is just one example of hundreds of projects already feeling the impact of the scheme’s claims cap, and with the possibility the scheme may be discontinued altogether, many funders and trusts feel it’s time to take action. 

Helen Gray, Benefact Trust Director, said: “Every day we see the incredible impact churches are having in their communities, but we also witness how stretched they are due to limited funds and resources.

“As a Christian grant-making charity, we want to continue to support as many churches as possible, but without vital schemes like the Listed Places of Worship Grant Scheme, we know that countless churches will struggle to get their projects off the ground, impacting the support we can provide.

“This is why it’s time to act, we must emphasise how essential this scheme is for the future of churches and the communities they serve.”

Benefact Trust, alongside other members of the Christian Funders’ Forum, has written an open letter to the government highlighting the need to continue the scheme beyond 2026 and reverse the budget cap. 

Ahead of the January debate, over 3,000 letters were received by MPs expressing their concerns over the potential closure of the scheme, now is the opportunity to galvanise support and have an even bigger voice.

We encourage you to join the cause and support this vital scheme.

Here is a template letter you can modify for your organisation

Benefact Trust will be continuing to follow updates on the grant scheme throughout the year, keep a close eye on our social media channels for the latest news.