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Delay sought for new rules on NHS accounts

By David Ainsworth, Third Sector Online, 21 January 2010

Department of Health asks Treasury for time to investigate governance of NHS charities

The Department of Health is asking the Treasury to allow it to delay the introduction of new rules that require some NHS trusts to include charity assets on their balance sheets, health minister Phil Hope has told the House of Commons.

In a written response to parliamentary questions, Hope said the department would use the delay to carry out a review of NHS charity governance. He said the review would ensure that the independence of such charities was "clear and transparent to all".

The new rules, based on International Financial Reporting Standards, say that if an NHS trust is the sole trustee of another organisation, it will have to record the organisation's assets on its balance sheet. Many NHS trusts have such relationships with associated charities.

Opposition MPs suggested last week that the Government might use the new rules to cut the budgets of NHS trusts if their associated charities brought large assets onto their balance sheets. But former third sector minister Hope has promised this will never be the case.

"The application of International Financial Reporting Standards to National Health Service organisations will have no effect on the independence of NHS charitable funds," he said.

"However, in recognition of the concern this issue has caused, we are working with colleagues in the Treasury and elsewhere to seek to delay the implementation of this requirement while we review the ways in which NHS charities are governed, to ensure their independence continues to be protected and is clear and transparent to all."

John Collinson, deputy chairman of the Association of NHS Charities, said he welcomed any delay in the implementation of the new rules, but said a clear solution was needed.

"This has already been damaging to NHS charities," he said. "We've had members of the public asking if they should change their wills or stop making donations."

He said his organisation and the Charity Commission both believed the IFRSs should not apply to charities.

Collinson said:"We would like to see more NHS charities appoint independent trustees. But we would not like to see more NHS charities appoint independent trustees in order to dodge this problem."