For over 40 years, local charitable hospices have provided the vast majority of hospice care within the UK, caring for over 360,000 patients and family members each year. They provide over 80% of the specialist palliative care inpatient beds within the health care system and are major providers of home based care, yet they are frequently disadvantaged compared to other types of healthcare organisations.

The Health and Social Care Act 2012 placed a requirement on the Secretary of State to report back to Parliament on the way in which the health care system operates for different types of organisations.  This requirement was influenced by a campaign led by Sue Ryder and Help the Hospices to encourage the Government to address the additional VAT costs that hospices face. Under current tax rules the NHS is able to recover VAT on certain non-business supplies that charitable hospices cannot. Hospices often cover this ‘VAT gap’ with charitable donations, diverting resources away from vital services.

Jonathan Ellis, director of policy and parliamentary affairs at Help the Hospices, said:

“With an ageing population and growing demand for end of life care, there is an urgent need to level the playing field for local hospices to support and develop their role as leaders, educators and major funders of end of life care within the communities that they serve.

Most of the funding to provide hospice care comes from local people, not from the Government.  Addressing the VAT burden on charitable hospices would help them in a difficult economic climate to use charitable funds to do what they do best – provide more care to more patients, families and carers in the local community.

Hospices are unique among providers of health and social care because they contribute so significantly to the funding and provision of end of life care – raising more than £30 for every £10 of government funding. As the report acknowledges, there is a need for stronger partnership working, using the expertise of both the third sector and the NHS to renew focus on providing services for the benefit of the patient. It is now up to commissioners and care professionals to work in partnership to turn this into reality.

We welcome the approach that Monitor has taken in conducting this review, listening to the voice of local hospices and we now encourage the Government to take early steps to deliver greater fairness for charities like hospices.”