We wish we'd acted sooner, admits charity hit by debts

St Luke's Hospital for the Clergy is no longer a hospital after selling its London building

A charity that provides healthcare support to Anglican clergy has been forced to sell its hospital and rethink how it will meet its objects after most of its assets were swallowed up repaying debts.

St Luke's Hospital for the Clergy was forced to sell its building in Fitzroy Square, central London, for £7.25m in 2009 after 25 years of running at a loss.

A new charity, St Luke's Healthcare for the Clergy, has been formed, but will begin life with less than £1m in the bank. It is researching which types of healthcare it can best provide.

From the sale, the charity had to repay about £3.5m in bank loans, £764,000 in donations dependent on the charity continuing as a hospital and £750,000 in tax and costs. It also repaid more than £650,000 to trustees, who had been personally liable for the debts of the unincorporated charity.

Patrick Mitford-Slade, chair of the charity, said that, with the benefit of hindsight, the trustees should have acted differently. "We could have sold the hospital three or four years ago," he said. "We also learned that limited liability would have been advisable and that it's not a good idea to leave things until a crisis hits."

Mitford-Slade said his board had decided to begin modernising the building in 2005, after being told the hospital would need to be renovated to meet care standards.

Work began in 2006, but the cost of the work increased and the hospital was forced to remain closed longer than had been expected.

The charity was unable to raise all of the £2.7m it had originally required to fund the work. And once the building reopened, the expected increase in the number of consultants paying to use the hospital as a base for appointments with private patients did not materialise.

The trustees decided to sell in December 2008, but an agreed sale broke down at the last minute in January 2009. A sale eventually went ahead in April that year.

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