Grand Larceny

HM Treasury have just published a Review which recommends the nationalisation of the assets of hospital charities. This must be rejected by the Government immediately. The recommendations could lead to up to £500m of charitable assets being recorded on government balance sheets.

The final report of the Treasury review group says NHS charities in England that have an NHS trust as their corporate trustee should have their assets recorded on the balance sheets of those trusts, which are of course state bodies.

Ministers must decide whether to implement the recommendations, which are part of a long-running debate over how NHS charities' accounts should be handled.

Four sterling members of the review group, including Ray Jones of the Charity Commission, and Keith Day, a representative of the Association of NHS Charities, published a "dissenting report", saying the review group's conclusion that consolidation was necessary was "potentially damaging" to charities. They are right. Well done to them for speaking out.

The Charity Commission has argued in the past that consolidation would be "wholly inappropriate". In 1947 the Charity Commission resisted the attempt by the then Labour Government to nationalise the assets of the hospital charities. I shall expect them to be as firm and vigorous in demanding these proposals are rejected this time. The Charity Commission representative on the review was on of those signatory to the 'dissenting report', and as such has said again "we cannot accept that... the imposition of [consolidated accounts] is justified". Quite right. Now the Commission needs to hold to that view robustly and defend charity assets from the state.

The review group made its recommendations based on a new accounting standard. But they have failed to understand the implications for charity and the damage this will do to trust and to the chances of these charities fundraising in the future.

There are 302 NHS charities in England, with assets worth about £2bn. Of these, 281 with combined assets of £500m have their parent NHS trust as their corporate trustee.

So time for ACEVO to spring into action. I have written to Lansley and to Danny Alexander demanding they reject these recommendations. They damage charity. They damage the health service. It says,

"Dear Andrew,

I am writing to urge you to resist the recommendations of the Treasury review into the consolidation of NHS Charity accounts.

As the 'dissenting report' of members of that review says, consolidation could have an adverse impact on levels of donations, and encourage "inappropriate treatment of charitable funds" - in other words, the potential use of an estimated £500 million of charitable funds by NHS organisations to plug holes in their own budgets.

To avoid consolidation, NHS charities would be required to go through costly governance changes at a time when, as the dissenting report points out, those governance arrangements might only last for a few years before more fundamental restructuring removes the need for consolidation to apply.

At a time when charities are under significant financial strain, and when the Government is pursuing the aim of 'liberating' NHS organisations to focus more on the people they exist to serve, it would be wholly inappropriate either to tie charities up in pursuing costly and unnecessary governance changes, to hurt their ability to raise donations, or to put them at risk of having their charitable funds purloined by struggling NHS organisations. It also raises the bizarre spectacle of a Conservative Government, committed to promoting charity and giving organisations more freedom from the centre, achieving what the nationalising Labour governments of the 1940s could not - the effective nationalisation of NHS charities.

I would strongly urge you to resist such moves, and instead to follow the recommendations of the dissenting report - namely to delay the requirement to consolidate NHS charity accounts until the Department of Health has brought forward proposals (which I understand are under consideration) to give NHS charities greater freedom, thereby ultimately making the consolidation issue obsolete.".