NHS charities that were set up to receive and manage charitable funds on behalf of NHS organisations are currently bound by both charity law and NHS legislation. The hospital trust is usually the sole corporate trustee of the charity.
Under the proposed system, NHS trust charities could establish new independent charities, into which the existing charities could transfer their assets. The new charities would have the freedom to appoint independent trustees and the charities would be subject to less oversight by the DoH.
The DoH said the proposals are designed to remove regulation by ministers and enable the charities to operate more flexibly and independently, while preserving the close relationship with the providers of NHS services they support.
The proposals follow a smaller consultation conducted last year, involving NHS charities and their linked trusts, and the Charity Commission.
The governance of NHS charities has proved controversial because of the high degree of influence that the DoH and NHS trusts have over them.
This level of influence, together with changes in UK accounting rules, meant that NHS trusts were considered by the DoH to "control" charitable assets and were told to record them on their own balance sheets – something the Charity Commission said undermined the independent nature of charity and would harm charities’ ability to raise funds.
Lord Howe, an under-secretary of state at the Department of Health, said that many NHS organisations wanted greater freedom and flexibility in how their charities are run. "We are confident these proposals will meet their needs and the expectations of generous people who leave legacies and make donations," he said.
Andrew Douglas, chief executive of Barts and the London Charity, which has campaigned for greater independence, said he was pleased by the proposals."This gives us some separation and will make it easier for us to raise funds," he said.
He added that the method of separation proposed by the DoH, which involves transferring assets into the NHS and out to a new charity, was "difficult and inconvenient" and that this might put some charities off.
"We'd like to see if there is an easier way," he said. "But if this is the only way, it's a good step forward."
There were about 280 NHS charities in the year ending March 2011, with a combined annual income of about £327m. That number is likely to drop to around 150 from April due to the merger and abolition of NHS bodies. The largest charity is Great Ormond Street Hospital Children’s Charity, with an annual income of £64m.
The deadline for comments on the proposals is 31 January 2013.