The Charity Commission has scrapped plans to carry out public benefit assessments on private hospitals and other health charities, because of concerns over whether it has the funding to do so.
The commission announced in December that it would carry out a round of assessments on sports charities and charities working for "the advancement of health", to test whether they could demonstrate they had charitable purposes and operated for the public benefit, as required by the Charities Act 2006.
The commission started its assessments on four sports and recreation charities last month. But a spokeswoman for the regulator said that this would now be its final set of public benefit assessments.
"Having considered how best to use our limited resources, we decided to concentrate on the arts assessments we had already started, followed by sports and recreation charities," the spokeswoman said.
"This was in line with independent research that indicated smaller charities and those involved in sport and recreation were most likely to have less awareness of the public benefit requirement."
The tests were set up to raise awareness and understanding of public benefit. A selection of independent schools, religious charities and arts charities have already been through the assessments.
A report by the Directory of Social Change, published in 2008, concluded that some major fee-charging hospitals would struggle to meet the public benefit requirement.
Jonathan Burchfield, a partner at law firm Stone King, said he was disappointed by the tests' cancellations.
"I think they were a useful way of demonstrating the commission's approach in this area," he said. "It would have been interesting to review private hospitals, and drawn a comparison between the requirements placed on them and independent schools."
But Nicola Evans, a senior associate at law firm Bircham Dyson Bell, said the commission was right to end its public benefit assessments.
"The process is expensive and time-consuming, both for the commission and the charities," she said. "It is unclear what benefit can be derived from it, because the commission is clear, quite rightly, that what applies for one charity will not necessarily apply to another, even one with similar objects."