Talks planned in dispute over accounts of NHS charities

Charity Commission in bid to break deadlock with Department of Health

  • This story was corrected on November 26: see final paragraph

The Department of Health is to meet the Charity Commission and charity representatives in a bid to break the deadlock over the accounts of some NHS charities.

Janet Perry, financial controller of the NHS, told health authorities last month that about 30 NHS bodies that are the sole trustees of the largest charities might have to move those charities' assets onto their own balance sheets.

The move was prompted by new international public sector accounting standards, to be introduced next year. The Charity Commission has objected to the proposal, saying it was "wholly inappropriate" for charitable funds to appear on public sector balance sheets, and has written to health authorities telling them they should not consolidate. The Association of NHS Charities will take part in the meeting.

John Collinson, deputy chairman of the Association of NHS Charities, said he hoped to persuade health officials that new accounting standards should not be implemented for another year.

He said the NHS had suggested charities with sole trustees should change their governance to meet the new regulations, but that this was not an immediate answer.

"While many of us have urged the bigger charities to review their governance, obeying accounting regulations should not be the motivation to do so," he said.

Nick Brooks, head of not-for-profit at accountancy firm Kingston Smith, said any requirement to consolidate was "out of touch with reality".

"Charities should not be consolidated unless they're not independent," he said. "And if they aren't independent, that should be an issue for the Charity Commission."

However, he said NHS charities should change their governance arrangements to avoid any conflict of interest.

  • The Charity Commission says its letter to health authorities had not been sent at the time the article was published.

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