Mr. Ivan Cooper:

We are delighted that the Vice Chairman has recognised our ambition for the role the community and voluntary sector can play in resetting our national priorities going on from here, as well as our European and global priorities, which are all interconnected in relation to the social dialogue. We are very pleased that the Government has initiated a discussion with the community and voluntary sector and environmental pillar. The Wheel is a member of the community and voluntary sector pillar with 17 national organisations that have taken part over the years in an ongoing social dialogue. Now the Government is interested in understanding how that can be expanded and reinvigorated in the new context. We are excited about that and will be, along with other members of the community and voluntary sector pillar, carrying the torch and encouraging the Government to maximise the extent to which voluntary organisations and civil society groups can participate in shaping national policy and setting national priorities.

The Vice Chairman asked about the charity VAT compensation scheme. The scheme has been a great success and has been hugely oversubscribed.

A €5 million level currently applies to the scheme. The way the scheme works is that charities apply to have a refund of VAT they have paid using funds that they have fundraised. VAT applies to anything a charity buys. Charities are not VAT exempt. What happens, effectively, is that fundraised income is used to pay Government tax. That was recognised as being fundamentally unfair so the VAT refund scheme was put in place. The scheme has been very successful. Under the scheme, charities apply to have the VAT they have paid in a particular year refunded to them. Clearly, however, there is not enough to go around, so organisations get the proportion of VAT back which is related to their proportion of the overall amount that all charities together have sought. My understanding is that, currently, it comes in at less than 10% of the overall amount that organisations have generally sought. There is precedent for this in Europe. The Danes have a similar scheme. Their scheme operates at the level of a €20 million rebate per year. We are calling on the Government to increase the amount from €5 million to €20 million in the next budget. It boils down to that. Even at the €20 million level, there will still be more VAT paid in than will be reclaimed by charities under the scheme. It has been enormously successful and is very welcome. We are simply seeking that the scheme be enhanced.

Regarding mergers and collaborative working, it is important to note that, in general, it is the experience of The Wheel that when mergers happen, collaborative working is a good thing. There is an imperative on public benefit organisations to seek always to collaborate and to avoid competing when they can. That is a very important principle. Merger is simply a very advanced form of collaboration. It is at one end of the collaboration scale. Many collaborating organisations might consider a merger. However, if they do, it is usually, and should be, on the basis of the effectiveness of the work they do and how the effectiveness of the work can be improved through collaborative working. It is our experience that where mergers succeed, they do not generally result in the fiction that there are many cost savings to be squeezed out of merging organisations. It is not really about that. It is more about maximising the effectiveness of the work and ensuring that if there are any, often relatively small, administrative cost savings attached to that, they are simply released into the increased effectiveness and impact of the work that is being done.

In our pre-budget submission we are calling for the Government to recognise that there are significant costs associated with organisations that are seeking to merge. It has to be done responsibly. There are fiduciary responsibilities that attach to trustees and board members. Due diligence work needs to be done. All this comes with costs. Merging organisations, if they are to do it responsibly, must have resources available to them to fund the additional costs of merging. We are calling for a €2 million fund to be put in place in budget 2022 to enable organisations that want to investigate whether they can merge and want to go on a merger journey to afford the cost of that. That is our request in simple terms.