A health and social care charity is celebrating its role in a significant step towards removing barriers for charities to deliver NHS services in England.

An amendment, originally tabled and then expanded in the Health and Social Care Bill, by Lord Patel of Bradford, will see the Government review the barriers affecting the involvement of charities, co-operatives and mutuals in the delivery of NHS services.

The original amendment, passed during the committee stage in the Lords, only called for a report that would look at the VAT loophole which could see charities having to use donations from supporters to pay VAT bills when they take on the delivery of healthcare services.

Sue Ryder, supported by Lord Patel, highlighted the inequality between the NHS and charities on VAT recovery on non-business supplies throughout 2011 and the charity has continued to work closely with the Government to find solutions to this problem. The expansion and strengthening of this amendment is a significant step towards this.

Lord Patel of Bradford said: “I am very indebted to Sue Ryder for its support and invaluable information in preparing this amendment.

“It stems directly from their campaign, which started in 2011, to raise awareness about the problem of irrecoverable VAT for charities providing healthcare services.

“For example, the NHS is able to recover VAT on certain non-business supplies that charities cannot. This may hinder them from taking full advantage of the Government’s agenda, which will see more services outsourced from the NHS to other providers. It can be seen as a significant barrier to entry for charities which may be forced to use their charitable funds to pay the VAT.

“This amendment now calls for the production of a report with recommendations to be laid before Parliament by the Secretary of State within a year on any matters that may affect the ability of charities, social enterprises, co-operatives and mutuals to provide healthcare services for the NHS.

“There are clearly major obstacles for charities and other not-for-profit agencies seeking to take on the provision of health services, most notably the kind of end-of-life care services provided by organisations such as Sue Ryder.

“I am sure the report will raise a number of very important factors and make recommendations that will improve service provision for those areas.”