Your column on the challenges of churches’ reordering in the light of unpredictable VAT refunds (13 April) came when our church was starting a big repair project. We were hit by the change in VAT when the Government decided to cap the amount available. With all our fund-raising work completed, we had to find another £30,000, as, on average, the refunds were only 50 per cent of VAT. Keep rattling the cage for us.

THE most common problem pre­sented to me at present is not bats in the belfry. That is a predictable problem that churches can find help in addressing. But the previously balanc­ing budget that gets dive-bombed by changing government policies — the direct ones, such as VAT changes, and the indirect ones, such as the loss of central — and local — government programmes for regen­era­­tion, development, and commun­ity — is more than a double whammy.

I suspect that we are in for several years of heartache before churches individually and collectively get out of the current financial conse­quences of recession, and settle into new, more limited possibilities for financing their reordering.

We cannot avoid the recession and its consequences. I am not into bank-bashing, as all sorts of people were cashing in mightily on the boom years, but the transition from the approaches we could adopt in the boom years to the more modest ones that we will be able to afford in the future will be very uncomfortable for many churches.

Some churches have not adjusted their expectations to the post-boom years, and they still plan enormous building projects. Others are caught part-way into projects, and there is no easy way forwards or back­wards.

With the most recent news that more funds are to be added to the Listed Places of Worship Grant Scheme (which repays VAT), you may expect to get more of your money back. It will depend on how many other places of worship apply for repayments. It may be that dio­ceses can create emergency funds to provide temporary loan capital to cover any cash-flow issues, so that grants, such as the one covered by the letter above, are not lost.

Churches that find themselves caught in the present dilemma have good reason to review where they have got to, and regroup.

Where applications have been sent to potential grant-makers giving a budget for works, I would suggest that you write to those funders, and request the withdrawal of the fund­ing bid. Make it clear that this is not a fault in your budget or manage­ment, but is the result of the sudden imposition of a possible 20-per-cent increase that is beyond your control.

If you have received some grant offers, and still have fund-raising to do, I would suggest writing to all the grant-makers to explain that the VAT change has caused disarray, and to ask if they would mind holding the grant while you get sorted out. This is especially important where grant-makers require you to spend the grant within one year.

Similarly, if you thought you had all the money, but have not yet entered a contract — maybe the work is still out to tender — I suggest that you freeze the programme, and assess whether the scope of the work has to be reduced, or part of the work held to a later phase. Write to let your funders know what you are doing, or the grapevine may give them unhelpful misinformation.

Remarkably, local fund-raising events will be relatively unaffected by change, but it is still worth updating your notices and leaflets.

maggiedurran@virginmedia.com