The Cranfield Trust has raised concerns that bidding for public contracts by consortium adds an additional VAT charge to those partners that are not leading on the bid.

At a meeting of the All-Party Parliamentary Group on Civil Society yesterday, the Trust’s vice-chair Erica De’Ath told minister for civil society Nick Hurd that government departments should accept bids from ‘partnerships’ rather than insisting on consortia.

“The problem with bidding in a consortium is that one organisation has to be the lead partner, taking the money, and that means everyone else has to pay VAT on the money that is made available,” she said.

“So there is an additional cost by virtue of being a consortium and we just wondered if this had been thought through.”

De’Ath also complained about the increasing red tape burden being demanded for Department for Education contracts.

“They seem to be confused about the difference between a grant and a contract, and the bureaucracy is becoming enormous - they want invoices for every single item which is a ridiculous waste of a charity’s time.”

Nick Hurd invited De’Ath to write to him detailing the problems and said he would take up both complaints with the relevant departments.

The Cranfield Trust supplies corporate volunteers to charities.