Guidance warns NHS charities to allow enough time for conversion to independent status

Document by the Association of NHS Charities also says their new governing document must be approved by the NHS body they're leaving

The NHS
The NHS

NHS charities that plan to convert to independent charity status should allow plenty of time for the change and remember that their new governing document must be approved by the NHS body they were previously controlled by, new guidance says.

NHS Charities: Conversion to independent status – outline guidance was prepared by the Association of NHS Charities at the request of the Department of Health and published last month.

The association’s guidance details how more than 250 charities that are bound to NHS bodies and governed by both charity law and NHS legislation can create new, independent charities and transfer their assets and activities into them.

This first became possible earlier this year after a DoH consultation. The first conversion took place on 31 July when Barts Charity broke away from the London-based Barts Health NHS Trust, for which it exists to raise money.

According to the new guidance, there are 263 NHS charities, of which all but 20 have an NHS body as their sole corporate trustee. Two pieces of advice in the guide are that trustees of NHS charities should allow plenty of time and remember that "the final form and content of the new charity’s governing instrument must be approved by the NHS body".

The guidance says that these charities might find conversion disadvantageous for reasons including the expense and disruption of the process and the potential extra cost once the independent charity is no longer administered by the NHS body.

Advantages it mentions include freedom from the public procurement regime and being unaffected by future NHS reorganisations. Other issues to consider in conversion include VAT implications, banking, payroll management, insurance and the potential need for audited accounts, it says.

All NHS charities will be obliged to convert eventually, it says, but no firm date for this has been set. When this date is set, remaining charities will be given two years’ notice.

A statement from the law firm Withers, which acted for the association in writing the guidance and is advising a number of NHS charities, said that conversion would "provide NHS charities with greater flexibility on their structure and operations through a new deregulation process" and give them greater freedom in their work.

Elizabeth Davis, head of the charities team at the law firm Blake Morgan, said: "Historically, many NHS charities have filled the ‘nice to have’ gaps in patient service, but they might now have a bigger role in funding core service or care provision. Independence of the charitable funds from NHS trusts and foundations might make this much easier. It might also offer opportunities for greater innovation and flexibility in fundraising."

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