Labour ministers to take control of hospital charity cash

Hundreds of millions of pounds of charity donations to hospitals are to be “nationalised” under an NHS accounting change, which critics say will make it easier to slash health budgets.

Ministers are imposing new rules on NHS charities requiring all donations — including those to specialist children and cancer units, local fundraising campaigns, teaching hospitals and local community trusts — to be listed on a hospital’s balance sheet.

The Charities Commission says that this is “wholly inappropriate” because combining the trust and charity accounts will jeopardise the charity’s autonomy and discourage donations. 

About £330 million was given to 300 NHS charities in the year to June 2008, and they control an estimated £2 billion of assets. A spokeswoman for the Commission said: “The Charity Commission does not agree with the interpretation of the accounting rules in the Department of Health letter to NHS bodies. We are currently engaging with the Department on this matter.”

Charities also fear that the change, due to come into effect in April, will be used as a smokescreen to hide cuts in health spending, with ministers reducing funds for organisations such as children’s hospitals that have successful charitable arms.

Jenny Willott, a Cabinet Office spokeswoman for the Liberal Democrats, said: “This could lead to hundreds of millions of pounds of charitable donations being effectively nationalised under the NHS.

“The Government has no right to get its hands on any charitable NHS funds. People make donations on the understanding that it is up to charities to decide how to spend it, not ministers.”

A source at a leading hospital said that the rule change appeared entirely unreasonable and risked creating unnecessary budgetary pressures and distorted disparities between hospitals with different levels of fundraising ability.

Ministers were banned from counting charitable donations towards the central NHS budget under the original legislation that created the NHS in 1948.

But this looks set to be reversed after the Treasury agreed to implement International Accounting Standard (IAS) 27. Now all NHS Trusts whose trustees have the “power to control” their charitable arm look likely to be forced to consolidate both sets of accounts in one. Estimates of the number of NHS charities affected vary between 30 and 300 organisations.


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