NHS (Charitable Trusts Etc) Bill

Debate between Jeremy Quin and Kit Malthouse

Friday 22nd January 2016 Commons Chamber

[Kit Malthouse]

I thought so. I am grateful to the hon. Member for pedantry, who is right.

This is one of the things about which I am concerned. We saw the notion of group-think in Kids Company. A group of trustees, led by a charismatic leader, felt themselves to be invulnerable. They thought that they should not be doubted, and they were hostile to external views expressing doubt about them. One only has to review the correspondence of Mr Yentob, with his wild claims about the death and insurrection on the streets that Kids Company’s demise would cause, to see that group-think in action.

I studied politics and economics at university, specialising in the psychology and behavioural side of politics, and we studied group-think quite closely. When future students come to study group-think, they will look at Kids Company as a perfect example of it. Those involved were trapped in group-think. If only somebody had been able to step in and take control earlier, the charity and the remnants of its good work could have been saved.

[Jeremy Quin]

My hon. Friend is referring to the charitable sector, which has billions of pounds of assets and does a vast amount of good. Tarring every charitable board with the same brush is grossly unfair.

[Kit Malthouse]

No, I am not tarring them with the same brush. I am saying that all boards—commercial, charitable or even political—must bear this in mind. That is the whole foundation of our modern governance structures. It is the idea behind having non-executive directors, who are meant to be external and to provide a challenge to make executives and those more involved in the work of an organisation think more carefully about what they are doing.

[Jeremy Quin]

My hon. Friend will be aware that a good board contains non-executive directors to fulfil that challenge function. They are appointed by the board; they do not need to be appointed by an external body.

[Kit Malthouse]

The truth is that non-executives are technically appointed by the shareholders, so they are appointed by people who have an interest in the board being challenged constructively. The problem with charities is that non-executives are appointed by the board, the members of which more often than not appoint people in their own likeness. When the members of a board get trapped in group-think, they will appoint people who agree with them. Brave would be the chairman or chairwoman of the trustees who appointed somebody awkward or difficult, who might question or challenge them, particularly when one charismatic person is in charge.

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[Kit Malthouse]

My hon. Friend is a dog with a bone. As I have explained—I think five times—I believe that the charities that we are considering are different because of the inextricable link with the institution that they serve. In the public’s mind, they are just a vehicle to give the money to the hospital and the national health service. Indeed, many boast about the percentage of money given to them that will be spent on the wards of a hospital. Those charities are seen co-funding, along with the Government, the NHS. I can see that not everybody is convinced, but I hope that others will speak in support of my amendments.

As I have said, the provision would be in the House’s control through a statutory instrument. It is not as though the Secretary of State could act unilaterally. We would all have control.

[Jeremy Quin]

I apologise to my hon. Friend: I rise not to support his amendment, but to oppose it, particularly on the point that he is making. His time is valuable. Does he really think that it is a good use of it for orders on this subject to be laid before this House and the other place, and for the matter to be considered on that grand scale? If he must vest these powers with the Secretary of State, does their exercise need to come back to this Chamber?

[Kit Malthouse]

I have the utmost respect for my hon. Friend, but that was a slightly odd intervention, given that much of the Bill is about one hospital and it is taking up many hours of debate in the House. I do believe that those kinds of things are serious, and, frankly, he and I have sat on Statutory Instrument Committees on much more trivial matters that take up the House’s time.

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[Kit Malthouse]

My hon. Friend is right. I correct myself. One clause relates to Great Ormond Street and the rest of the Bill clears up some anomalies. The debate is not about Great Ormond Street’s requirements, but about other ancillary bits in the Bill. One wonders whether the rest of the Bill could have been included in the Charities (Protection and Social Investment) Bill, and we could have had a short measure about Great Ormond Street, but that is a matter for the Bill’s promoter and sponsors.

[Jeremy Quin]

Will my hon. Friend give way?

[Kit Malthouse]

No, I would like to move on to amendment 2. I am conscious that others wish to speak.

Amendment 2 would address a particular issue that I have come across in my constituency work. The only national charity that is located in North West Hampshire is the Macular Society. It is quite small and raises about £5 million or £6 million a year, most of which goes into research. One of the complaints of the Macular Society, which obviously deals with sight-related illnesses, is that enormous charities for sight and blindness, such as RNIB and Guide Dogs for the Blind, which raise many tens of millions of pounds—more than £100 million each—put hardly any money into research. Although they are engaged in blindness in its wider sense, they do not use their muscle to improve the lives of those who are afflicted by blindness or partial sightedness through trying to find cures and therapies.

The Macular Society and others complain about that and the fact that, if there was more research, we might be able to do something about the conditions. Part of the reason for the lack of research must be the disconnection with the organisation with which the charities should engage. For example, although I have not looked, it would doubtless be helpful to Guide Dogs for the Blind if it had representatives on its board from the scientific community and some hospitals, such as the Western eye hospital, because then the charity might be compelled to put money into the right causes.

The amendment seeks to ensure that, when an NHS charity is attached to a particular hospital, that hospital is allowed to put at least one trustee on the board. The charities need to stay connected. They need to have a line of communication and to be able to see the right priorities in the organisation rather than decide on their own pet projects, which they foist on the hospital without negotiation. The disconnection between charity and purpose can often happen, and it seems to be particularly pertinent to blindness.

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[Kit Malthouse]

My hon. Friend is right, and anyone who is putting together a board of trustees wants to ensure that it contains a full range of skills and experience. As I have said, trustees appoint themselves. No one externally is taking a wider view of how broad the ambit is of those people’s experience, how fruitful or consensual their discussions are, or whether they are being challenged. We all know of charities that are made up from small numbers of people. Often, those jobs are undervalued and take a lot of work. The people who act as charity trustees are often heroic, and there are too few of them. Many people will not take on such onerous duties, so there are often small numbers of trustees, particularly in some of the smaller charities such as friends of hospitals and so on. In such circumstances it behoves the Secretary of State to keep a weather eye, and when problems with a local charity are brought before MPs and we wish to raise them with the Secretary of State, we must be able to do so in the knowledge that he or she will be able to do something and appoint somebody to challenge or change things.

[Jeremy Quin]

My hon. Friend paints a very dangerous picture. He was referring to circumstances in which a charity strays into inappropriate political activity, but that is purely the remit of the Charity Commission. In such circumstances, the last person who should be intervening is the Secretary of State—we would be inviting them to wade into a political quagmire.

[Kit Malthouse]

That may be so, but—I hesitate to stress this point again—in my view these charities are different. They trade off the advantage of being associated with the national health service. People see them as part and parcel of the health service; they are not viewed as separate in the way that Oxfam or the Guide Dogs for the Blind might be. If something is called the Great Ormond Street hospital charity, people see it as a wing of the national health service.

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[Kit Malthouse]

I apologise if that is a vision of doom, but much of our life in this House involves dealing with the stream of human misery that comes through our letterbox daily. We have urgent questions and statements on all manner of horrific events here and overseas, and much of our legislation is to plan for the unexpected, which seems sensible. Much of our legislation dates back many hundreds of years, and I hope that this Bill will last for a similar period. Who knows whether there will be trustee vacancies in the generations to come. I hope not, but if there are, it would be sensible for the Secretary of State to appoint someone. At the moment, there is nobody else to do it.

[Jeremy Quin]

In these hopefully extremely unusual circumstances, does my hon. Friend envisage that, once again, the process could drag through both Houses? If a charity tragically loses all its trustees, are we expected to go through the full rigmarole of full parliamentary scrutiny? That seems strange.

[Kit Malthouse]

I do not think that I have attached that requirement to this straight appointment. If there are no trustees, who objects to the Secretary of State making those appointments? Can anyone think of anybody better? I certainly cannot. Possibly the chief executive of the hospital, but given that they are probably appointed under the influence of the Health Secretary, why not allow the Health Secretary to do it?