Consideration: Payments that are not Consideration: Grants: Local authority payments to Local Involvement Networks (LINks)
LINks are bodies introduced under the Local Government and Public Involvement in Health Act 2007 to replace Patients’ Forums. Their principal functions are to get the local community involved in shaping local care services, providing the local community with a means of monitoring local care services and telling those who commission, run and scrutinise local care services local people’s recommendations for improvements.
Local authorities are statutorily required to establish LINks in their areas, which they do by engaging “host” organisations. The hosts set up the LINks and then assist them in performing their functions. The Government has funded the scheme by allocating £84m to 150 local authorities, this being a portion of the Area-Based Grant. It is received from Department of Communities and Local Government (DCLG) annually and paid to the local authorities in twelve monthly instalments.
The local authorities have an obligation to establish the LINks that the Department of Health wishes to be set up. Although the funds are channelled through them to ensure that they are securely held and applied to the intended purposes, they are not responsible for actually running the LINks because the Act specifically requires the bodies to be independent from each other. The local authorities are therefore merely the “conduits” by which the funds are channelled to the hosts or LINks.
Hosts are permitted to retain a portion of the funds for the reimbursement of their own expenses and this will be outside the scope of VAT. Similarly, the LINks are not providing any services to the local authorities and any funds that they receive are also outside the scope of VAT. The activities of both hosts and LINks will be non-business activities.