NHS (Charitable Trusts Etc.) Bill — House of Commons, 2015-11-06
Topic: Health
Alistair James Hendrie Burt (Conservative, Centre-right): That is absolutely right. The House will be pleased to know that I do not intend to go further down that road. In the context of recent discussions, it is important to ensure that the misuse of charitable funds is the exception to the rule. It is important that people retain confidence and faith in what charities do. That is why it is important to have a rigorous examination whenever allegations are made about things being wrong. In the NHS, such confidence is vital In practice, the Secretary of State has delegated his responsibility for making trustee appointments to NHS bodies to the Trust Development Authority, which is a special health authority. In addition to having powers to appoint trustees to an NHS body, the Secretary of State retains powers under NHS legislation to appoint special trustees for certain university hospitals or teaching hospitals. Those special trustees have narrower objectives than other NHS trustees. The special trustees’ objectives are limited to holding property on trust mainly or wholly for the hospital for which they are appointed, or for any other part of the NHS associated with hospitals. In contrast, all other NHS trustees may hold property for any purposes relating to the health service, as well as for the purposes of their linked NHS body As the House has heard, following the Government’s response to the consultation, there is now a process for NHS charities to convert to independent status. NHS charity trustees need to assess how they see the NHS charity’s future in order to decide whether or not to convert. There are a number of advantages to conversion. An independent charity’s liability can be limited. One main issue with the current position is that trustees appointed by the Secretary of State risk unlimited personal liability, and that can impact negatively on moves to attract new trustees with the relevant experience and expertise. Moving to independence allows trustees to form structures, such as limited liability companies that provide them with limited liability, thereby enabling them to tackle more significant and innovative projects Furthermore, in the eyes of a potential donor, an NHS charity can be seen as too close to Government. Experience has shown that donors—especially major donors—can be reluctant to give if they think the charity is simply seeking money that could or should be provided by the Exchequer. Some grant-giving charitable foundations will not entertain applications from NHS charities simply because of their connection to Government. An independent charity is able to adopt wider charitable purposes in respect of funds raised after it has become independent, and enter into more innovative fundraising initiatives, collaborations and mergers Independence removes the need for the charity to comply with NHS legislation, and enables it to be regulated solely under charity law by the Charity Commission. That reduces the administrative burden, costs and calls on charity staff time. It also removes the need to be tied to the "Agenda for Change" pay structure. "Agenda for Change" was not designed for charities and for some it hampers their recruitment of suitable staff at an appropriate salary There are, however, some drawbacks to converting to independence and some costs to conversion. There may be additional costs to being an independent entity, some minor VAT disadvantages, and the NHS body may fear a loss of influence over its charity. Each set of trustees has to decide what is best—whether to convert to independence or have corporate trustee model arrangements. Conversion involves the creation of an independent charity outside the NHS. As my hon. Friend said, conversion to independent status involves the creation of a new charity, usually in corporate form, either as a company limited by guarantee or a charitable incorporated organisation in relation to which Secretary of State has no powers. Alternatively it could involve the transfer to the new charity of all the charitable property of the NHS charity, or the winding up of the NHS charity The relationship between the NHS body and the independent charity is important. The conversion process requires a formal agreement, or memorandum of understanding, to be in place. The content of that is to be decided between the parties, but there must be a binding obligation on the NHS body to transfer all charitable donations it receives to the independent charity. The Department is also of the view that the NHS body should have some involvement in the new charity’s governance arrangements, for example by having a specific place on the board. That is because of the commitment for all future donations to be transferred to the independent charity, and because the independent charity’s objectives will continue to relate to the NHS The independent charity’s governing instrument—such as articles of association or its constitution—must ensure that the existing objects of the independent NHS charity are the same as those applying to the funds transferred from the former NHS charity. It will, however, be possible for the independent charity to have wider objects for new funds raised after independence. Prior to completion of the conversion, the Department must be satisfied with the final memorandum of understanding, and see evidence that the NHS body’s board has considered and approved the conversion As the House has already heard, five NHS charities with appointed trustees have converted to independent status: Barts Charity, Alder Hey Children’s Charity, Guy’s and St Thomas’ Charity, Birmingham Children’s Hospital Charity and Great Ormond Street Hospital Children’s Charity. Of the 16 remaining charities with appointed trustees, six have formally notified the Department that they are converting to become independent, one has formally decided to revert to corporate trustee status, and the other nine are at various stages of deciding the best way forward. One NHS charity with corporate trustee arrangements, Royal Brompton & Harefield Hospitals Charity, has already converted to independence, and Yeovil District Hospital NHS Foundation Trust charitable fund has notified the Department that it has decided to convert to independence—my hon. Friend the Member for Yeovil will know it well. The Department is aware of other charities with corporate trustees that are actively considering conversion to independence In summary, the Government have listened to the NHS charities and given them what they asked for. NHS charities can, if they so choose, do away with dual regulation, and gain greater independence under the sole regulation of the Charity Commission. Alternatively, they can have corporate trustee arrangements that provide a tried and tested means of managing charitable funds. This Bill makes good on the Government’s decision to repeal the Secretary of State’s powers to appoint trustees to NHS bodies. They are no longer needed. It also provides powers for the Secretary of State to transfer, by regulations, property from the appointed trustees to their linked trust, if any Secretary of State-appointed trustees are still in place when those powers are repealed The Department of Health has told the NHS that the powers to appoint trustees would not be revoked before April 2018, to provide a period of grace for trustees appointed by the Secretary of State to decide the most appropriate legal form for their charity in future. As we have extensively discussed, the Bill amends the Copyright, Designs and Patents Act 1988 to provide for the right in perpetuity for royalties from the play "Peter Pan" to be conferred on Great Ormond Street Hospital Children’s Charity. This Bill will enable the charity to complete its conversion to full independence I appreciate the points that have been made today and the way that the House has handled the Bill, and many colleagues have contributed. The Government are supportive of the Bill’s intentions, not because it delivers what we want, but because it helps to deliver the model and freedom that charities themselves have asked for I will conclude with one final quote from J. M. Barrie—[Interruption.] It is a final quote: "Those who bring sunshine into the lives of others cannot keep it from themselves" Those of us who know my hon. Friend the Member for Aldridge-Brownhills, will know that that is certainly true about her, and I commend her Bill to the House.