NHS (Charitable Trusts Etc.) Bill

Kevin Foster Excerpts

Friday 6th November 2015 Commons Chamber

[Wendy Morton]

My hon. Friend makes a useful point. The important point is that whereas the NHS charity can benefit from this new independent model, there will always be accountability. This is not public money but money that comes from benefactors and donors, so it is right and proper that the trust instilled in the process of giving is maintained at all times.

[Kevin Foster (Torbay) (Con)]

My hon. Friend is making a great speech in support of her Bill. Does she agree that that very independence gives beneficiaries the confidence that their money is spent as intended and that the wealth of charity law is there to ensure that funds are put to the right purpose?

[Wendy Morton]

My hon. Friend makes a valid point. I shall explain that a little more later, but the Bill is about creating independence while maintaining accountability. I believe that we are looking for a route to enable these charities to move forward and to be on a more level playing field with some of the big charities operating across the country. Let us not forget that this is something that they have been asking for.

Collectively, across the country, about 260 charities exist to receive and manage charitable funds on behalf of NHS bodies. I am sure that everyone in the House would agree that they do fantastic work and that many Members are aware of local hospital charities in their constituencies. My preparation for this Bill made me think back to when my sister, who was five or six at the time, spent six weeks in the local NHS hospital and my mum was able to stay near the hospital thanks to accommodation that was provided either by a “friends of” organisation or a local charity that provided that sort of sheltered accommodation. Without that, she would have had to make the long journey to and fro every day. I am sure it made a huge difference, not only to her, but to the whole family.

Hon. Members will be interested to learn that just over £345 million was raised by these charities in the past financial year, supporting patients and staff right across the country. I am sure everyone in this House would agree that they make an outstanding contribution and are deserving of our support. Members may be asking why it is necessary to legislate, and that is a perfectly good question. It is one that I have asked, and I now wish to answer it. In simple terms, the Bill is good housekeeping; it is a matter of follow through. The charitable environment has moved on and there is a need to provide certainty in an already complex world and a complex structure. The Bill seeks to remove the Secretary of State for Health’s powers to appoint trustees, so it will draw that process to a conclusion. The Bill is overdue and it makes sense.

Currently, 16 NHS charities have trustees appointed by the Secretary of State for Health and are directly affected by the Bill. They are bound by charity law and NHS legislation. They are currently unincorporated and their trustees have unlimited liability. This means that the 16 NHS charities will choose either to revert to a corporate trustee model, meaning that the board of the NHS body for which the trustees were appointed acts as trustee of the charitable funds, which is how many NHS charities already successfully operate today, or, as many of the 16 have indicated they would like to do, they can convert to become independent charities without Secretary of State-appointed trustees.

[Wendy Morton]

I will come on to deal with some of those benefits later. Anyone would think my hon. Friend had read my speech, because the next words on it are “six charities”. I can assure you, Mr Speaker, that no one has seen it. Six charities have already completed the transition to independence. They include Barts Charity, which raises money for Barts Health NHS Trust, including St Bart’s hospital. That was the first to convert to an independent model. The others are Alder Hey in Liverpool; Birmingham Children’s Hospital Charity, which is close to my constituency; and Guy’s and St Thomas’. The Royal Brompton & Harefield Hospital Charitable Fund has also become an independent charity. They are all able to benefit from greater independence and less bureaucracy.

[Kevin Foster]

Why was it necessary to bring a Bill before Parliament to deal with these issues and make these changes? Why could a legislative reform order not have been used?

[Wendy Morton]

An LRO was mentioned to me early on when I was doing my research on the Bill, but this Bill covers two parts; one is the Great Ormond Street part and the other is about the trustees, so an LRO was not appropriate as it was not the right vehicle to enable those things to be brought together and taken through Parliament. There was a streamlining of the process, with no duplication and less bureaucracy.

The other charity to have converted to independence is Great Ormond Street Hospital Children’s Charity. It has started the process of moving to independence. I have made specific reference to it because of its unique status and the need for specific legislative change, and I will come back to that point later. A further six have now notified the Department of Health of their intention to convert to the independent model. Another is in the process of reverting to a corporate trustee model, which will be completed by 1 April. Of the remaining nine, about half have agreed to independence, but have not yet formally informed the Department of Health, while the others are in discussion with their trustees and hospital boards. Clearly, many have made the decision, and many others are in the process of doing so.

Earlier in the summer, I met the hon. and learned Member for Holborn and St Pancras (Keir Starmer), and I have written to Members whose constituencies have an NHS body with trustees appointed by the Secretary of State, which would be affected by my Bill, to keep them fully informed. The Bill is supported by Great Ormond Street Hospital charity and NHS charities more generally. It also has the support of the Association of NHS Charities, with which I have met. Recently, I attended a forum where I spoke to some of the association members. I was reassured by their support for the Bill and by their feedback about how it would affect them in a positive way.

The parts of the Bill that would effect the change are intended to be brought into force on 1 April 2018, which gives this group of 16 hospital charities time to consider and to finalise their positions. Lines of accountability would also be simpler, as the new independent charities would be accountable to the Charity Commission, with the additional management bureaucracy no longer being needed.

I am grateful for the support of the hon. and learned Member for Holborn and St Pancras, who is in his place and in whose constituency Great Ormond Street Hospital Children’s Charity is based. During the summer, I was very fortunate to go to Great Ormond Street hospital and to meet some of the charitable trusts. I met the staff and learned at first hand about the tremendous work that they do in support of the hospital, staff, patients and families. I was lucky enough to be taken on a tour of parts of the hospital; it is the most amazing place in the world. I visited the Peter Pan ward and the chapel—I do not think that there is a Wendy ward, but who knows?

--- Later in debate ---

[Wendy Morton]

In a nutshell, the figure is significant, and I will come on to that shortly.

The charity funds vital support services that care for the child and often the whole family: financial advice, parental accommodation, as well as spiritual support and helping families to stay together and manage their lives during what can be very difficult and trying times.

The Great Ormond Street hospital charity has a large number of donors, individual companies and, I am told, celebrities who support their work. On fundraising, Members will be interested to know that the charity raised £80,981,000 in the financial year 2014-15—an increase on the previous financial year—so the figure is indeed significant.

One of the most generous donors in its history is, of course, J.M. Barrie. As the Great Ormond Street Hospital Children’s Charity is keen to take advantage of the opportunity to move to independent status, specific legislation is required to provide for the rights to the “Peter Pan” royalties to be given to the new charity. The idea of royalties being paid to a charity is not unusual in itself. As we approach the run-up to Christmas, I am reminded of songs recorded for charity where royalties go into charitable trusts, but the relationship between Great Ormond Street hospital and “Peter Pan” is different. It is already a unique situation, and a unique solution is required to enable the rights to the crucial royalties to be given to the Great Ormond Street Hospital Children’s Charity, so that Great Ormond Street hospital can continue to benefit from the generous J.M. Barrie bequest.

[Kevin Foster]

My hon. Friend is being incredibly generous with her time in allowing interventions. Will she clarify something? Does Great Ormond Street receive royalties from only the original book featuring Peter Pan and Wendy, or does it receive them from subsequent publications and performances?

[Wendy Morton]

The charity continues to receive royalties. In fact, there are many productions of “Peter Pan” around the country in the run-up to Christmas, and the charity continues to receive royalties or agreed donations when such productions are performed. We must ensure that the charity continues to get those royalties, which makes the Bill even more important.

J.M. Barrie donated all rights in “Peter Pan” to Great Ormond Street hospital in 1929. He died in 1937, but the hospital enjoyed a further 50 years of royalties. On the eve of the copyright expiring, the J.M. Barrie bequest acquired its unique legal status, as a direct result of Lord Callaghan’s amendments to the Copyright, Designs and Patents Act 1988, which ensured that, despite the copyright in the work expiring on 31 December 1987, the special trustees for Great Ormond Street hospital would have the rights to royalties in respect of all commercial publications or public performances of “Peter Pan” and would hold them on trust for the purposes of Great Ormond Street hospital. The relevant provisions are found in section 301 of and schedule 6 to that Act.

The royalties are now held in perpetuity, so J.M. Barrie’s generous gift will continue to benefit very sick children and their families for as long as the hospital exists. My Bill seeks to support the continued legacy of this great children’s author from Kirriemuir in Scotland. I do not know whether any Member present in the House today has heritage or roots in Scotland, but there is certainly a link back to north of the border.

--- Later in debate ---

[Anne Marie Morris]

I am appropriately reprimanded, Mr Speaker. I shall ensure that, in particular, I give you the focus and attention you clearly deserve, and indeed Members on the Opposition Benches.

I will continue with the history behind this valuable Bill. The Bill addresses concerns about the Secretary of State’s powers to appoint trustees of NHS foundations and trusts. In 2012, Barts and The London Charity and the Royal Brompton & Harefield Hospitals Charity said that it was

“unclear as to why the Department seems at pains to preserve the Secretary of State’s…ultimate control over the appointment and removal of trustees”.

They added:

“We broadly agree with the stated aims of the review and would welcome the outcomes listed in”

the report,

“particularly those that would result in NHS charities being able to deliver improved services to NHS patients as their beneficiaries.”

In “Review of the regulation and governance of NHS charities”, the Government’s response to the consultation, the Secretary of State said that he was

“willing to seek to remove those specific legislative provisions as soon as possible.”

The Bill allows him to fulfil that promise.

The Bill refers not only to past consultation, but to past legislation. Following the expiry of the copyright on “Peter Pan” in 1987—50 years after the death of J. M. Barrie—it was concluded that Great Ormond Street hospital should continue to benefit from Mr Barrie’s gesture, and legislation was enacted to do so under the Copyright, Designs and Patents Act 1988. Sections 301, 304 and schedule 6 briefly became redundant, due to a European Union directive on copyright, which meant that copyright law was

“harmonised at 70 years after the death of the author or 70 years after the work is lawfully made available to the public”.

The directive was implemented on 1 July 1995, giving Great Ormond Street hospital extra copyright until 2007. The 1988 Act then came into force and that unique Act remains in place to this day.

The Bill builds on this House’s commitment to Great Ormond Street hospital to benefit from the royalties from “Peter Pan”—as laid out in the 1988 Act—by effecting a change in the identity of the person on whom the right is conferred. That is because, under charity law, the trustees have converted from being special trustees appointed by the Secretary of State to being an independent charity.

There is much more to the relationship between Barrie and Great Ormond Street hospital than a benevolent gesture. Barrie’s brother was the inspiration for the play after his tragic death just before his 14th birthday. His mother was said to take comfort from the fact that her son would remain a child forever, and thus the seed was planted for “Peter Pan”.

“Peter Pan” is the story of how a young family travel to a magical land—Neverland—with the help of a little bit of fairy dust. They learn that family is a very important concept, and I have no doubt that many of the visitors to Great Ormond Street hospital and many hon. Members can relate to that. They encounter numerous perils in the shape of a hook-handed pirate, a crocodile that has swallowed an alarm clock and a jealous fairy named Tinker Bell. The story concludes with Peter Pan, the boy who did not want to grow up—I know many other boys who do not want to grow up, many of them quite old—being unable to connect with his friends as they grow older and he remains a child.

Great Ormond Street hospital works to make sure that children do get that opportunity to grow up, but without losing the comfort and experiences of being a child and enjoying their young lives. Sadly, some visitors to Great Ormond Street do not grow up, much like Barrie’s younger brother David, and the connection to Peter Pan is therefore strong ever more.

Since its completion in 1904, “Peter Pan” has formed the basis of nine films, including a spin-off series on Tinker Bell, one radio adaptation and nine TV shows since 1955, the first of which was a stage adaption aired on NBC. Seven video games contain characters from the “Peter Pan” universe. Not only that, but “Peter Pan” has continued to be reproduced in countless plays, books and comics. According to the Great Ormond Street website, between now and next March, 23 runs of “Peter Pan” will be performed across the country—north, south, east and west—including in the northern powerhouse, which is a testament to the fantastic work and its legacy.

Barrie was a great supporter of the work Great Ormond Street hospital did then; it continues to do such work to this day. In 1929, he was approached to sit on a committee to buy some land so that the hospital could build a much needed new wing. Barrie declined to serve on the committee, but said that he hoped to find another way to help. Two months later, the hospital board was stunned to learn that Barrie had handed over all his rights to “Peter Pan”. At a Guildhall dinner later that year, Barrie, as host, claimed that Peter Pan had been a patient in Great Ormond Street hospital and

“it was he who put me up to the little thing I did for the hospital.”

It therefore seems fitting that such a gesture was made to the hospital to continue its great work.

As my hon. Friend the Member for Aldridge-Brownhills said, Great Ormond Street Hospital Children’s Charity raises money to enable the hospital to provide world-class care and to pioneer treatments and cures for childhood illnesses, with an estimated 255,000 patients coming through its doors every year. The hospital originally had just 10 beds and two doctors.

[Kevin Foster]

My hon. Friend is making a long and strong speech about the benefits of Great Ormond Street hospital. Does she agree that although the hospital is based in London, it actually provides specialist care across the UK, including for some of our constituents in Devon?

[Anne Marie Morris]

My hon. Friend makes an entirely correct comment. He is absolutely right that Great Ormond Street hospital makes a fantastic contribution across the country, and those of us representing the south-west have constituents who have directly benefited from the fantastic services that the hospital offers. He was quite right to make that point.

--- Later in debate ---

[Marcus Fysh (Yeovil) (Con)]

I am grateful for the opportunity to speak in this debate. I congratulate my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) on bringing forward the Bill, which would allow this massively important charity to move forward.

My father is a consultant paediatrician, a neonatal intensive care specialist and a former president of the paediatric assocation of the Royal College of Medicine. As a child, I spent many Christmases visiting wards and seeing very sick children. That made an indelible impression on me, and now that I have my own children I remember the many faces that I saw. I therefore have some understanding of what goes on at Great Ormond Street hospital, with which my father worked closely on many occasions. It is truly leading the way on treatment and on research.

There are good facilities for sick children at the hospital in my constituency, and I pay tribute to all the incredibly committed doctors and nurses who work there. As we have heard, more difficult cases are often referred from other parts of the country to the London trusts, and particularly to Great Ormond Street because of its cutting-edge work.

I was involved in helping one family in my constituency, the Bennett family, to go to Great Ormond Street. They were incredibly grateful for the benefits that the Great Ormond Street charity provided, and particularly for the help they received with accommodation at what was an extremely difficult time.

Yeovil has its own hospital charity, Flying Colours. I pay tribute to its manager Sarah Cherry and all the other people at the district hospital, who have managed to raise more than £500,000 for better facilities and an expansion of the hospital’s special baby unit. That is intended to support, in particular, children who are born with addictions, which I know can be one of the most distressing conditions to witness. There are other great charities in Yeovil, including St Margaret’s hospice, which, because of the way in which it was set up, already has the flexibility that allows it to raise money in different ways. It would be great if charities such as Flying Colours had the same ability.

“Peter Pan”, by J.M. Barrie, is a perfect story to associate with the Great Ormond Street charity, and we should thank Barrie for the foresight that he showed in helping those who are indeed forever young in some cases. I should add that I know something else about his relationship with the hospital: his family used to live in Bloomsbury, which was, of course, a great centre of the London literary world, and it is nice that it retains that association with the hospital to this day.

However, the fundraising of the Great Ormond Street Hospital trust goes much wider than the bequest of J.M. Barrie, and I think it needs the flexibility that would allow it, too, to raise money in a number of different ways. J.M. Barrie’s copyright is sometimes disputed, particularly in America. The Bill’s proposal to reduce the liability that the trustees can face is a positive step, because no one wants to be sued by the Americans.

[Kevin Foster]

I entirely agree with what my hon. Friend is saying. It is not just a question of the tactics that the trust can use to raise funds. The Bill will enable those who donate, and who participate in fundraising, to feel confident that the charity, and those who are independent of the Government, will spend the money and decide how it will be spent.

[Marcus Fysh]

My hon. Friend has made a very good point.

The Bill will provide the flexibility, the independence, the reduced liability and the reduced operation costs that will allow the charity to maximise its innovation, the help that it gives to other people, and the great work that is done in the hospital, and I commend it to the House.

--- Later in debate ---

[Kevin Foster (Torbay) (Con)]

It is a pleasure to speak in the debate and to support the Second Reading of the Bill. Discussing a Bill about Peter Pan proposed by Wendy was not one of the subjects I expected to debate in this Chamber when I was elected, but the Bill has a serious purpose as it makes clear the independence of the charitable trusts it covers.

It is right that we should have oversight when public money is being spent, and the NHS is subject to plenty of oversight, including through this Parliament, but this is not about taxpayers’ cash but about the additional money that people freely donate. People donating should have confidence that the trustees, who are completely independent and whose goals are solely those of the charity, will decide exactly how the funds will be used. A trustee or director appointed by the Secretary of State will clearly be cognisant of their duties under charity law to put the charity’s interests first, but being appointed by the Secretary of State creates the idea that such trustees are there to represent someone else: even though those who are familiar with the law will understand the role of a trustee, that is not the impression given. It makes sense that the charities referred to in the Bill are in a similar position to most other charities in the country and may, through their members and supporters, find trustees and appoint them to the board to exercise their duties rather than having someone appointed for them by the Government.

Charities in the NHS bring additionality to NHS services; they are not about replacing them or replacing funding from the taxpayer, but about doing extra things. I think particularly of the Torbay Hospital League of Friends, an independent charity that raises money to support services at Torbay hospital and uses its flexibility and independence to get people to donate. Its “This is critical” campaign aims to equip the critical care unit that is being built. Public money provides the basic service, whereas charitable bequests and donations enhance the service.

[Anne Marie Morris]

Does my hon. Friend agree that one of the benefits of this independence is that it encourages not only donations but people to give their time? Charities need not just money but volunteers to give their precious time not only for fundraising but to work with families, patients and young children. Does he have any thoughts on that?

[Kevin Foster]

My hon. Friend is absolutely right. Charities depend on the money and time donated. That might mean time donated to raise funds for the charity or, as she mentions, for other work. Everyone can take part, rich or poor. An hour donated is an hour donated. As she will know, Torbay hospital’s cafeteria is staffed by volunteers. It not only raises money for the charity in the hospital but provides a service. People might have come in and heard not great news, or they might be anxious and stressed with a relative in hospital, and they get a valuable pastoral service over a cup of tea and a cake from volunteers who, in some cases, have been involved for many years. They provide an excellent service.

Today, we are naturally talking about the structures and finances of a charity. As my hon. Friend the Member for North Dorset (Simon Hoare) said, we should ensure that the money cannot go on Lucky Lad in the 3.10, but we should also not forget that volunteers are at the heart of charities and how they operate and work. If the charities are truly independent, that will only enhance their ability to attract volunteers, get donations and make a difference.

[Wendy Morton]

Does my hon. Friend agree that, under this new model, charities will be able to bring in a new blend of skills and expertise, enabling them to increase capacity and build on their strengths?

[Kevin Foster]

My hon. Friend is absolutely right. In my constituency, for example, we have many people over the age of 60 who have retired from professional careers. They reach the point in life where they wish to retire from full-time work, but they still have skills and abilities that they want to offer, and might be thinking about a social rather than a financial reward. Having more flexibility in the charities’ structures means that they can bring in more of those people. People who might be slightly reticent about being appointed by the Secretary of State, perhaps because of their previous job, might be delighted to be involved in an independent charity that is committed solely to its objects.

[Antoinette Sandbach]

The risk attached to the appointment by the Secretary of State is the perception that it might be a political appointment when it is actually an independent appointment. That is what the Bill removes.

[Kevin Foster]

I could not have put it better myself. My hon. Friend is right that although the Secretary of State might appoint someone independent with skills and abilities such that they become a trustee by another route, the fact that they are appointed by the Secretary of State makes it appear that they are the Government’s person, even if they are diametrically politically opposed to the Government of the day. I am sure that the Minister will be able to think of examples of Government appointments who are not the most supportive of the current Administration.

[Alistair Burt]

Sometimes they are Ministers.

[Kevin Foster]

Indeed. This is a bit like the reforms to school governors, where we have reduced the number of local authority appointments. Although some were very independent minded and focused solely on the school and its interests, in other areas it was almost a tradition to have a certain number from Labour, a certain number from the Conservatives and a certain number from the Lib Dems.

[Bob Stewart]

None from the Lib Dems.

[Kevin Foster]

I accept that at the moment a Lib Dem and an endangered species have something in common. I will return to the subject of the Bill, despite the generous opportunity offered by my hon. and gallant Friend to make a remark about the political situation west of Bristol.

Why, as a Devon MP, am I keen to see the Bill make progress, given that it relates particularly to Great Ormond Street? As I said in my intervention on my hon. Friend the Member for Newton Abbot (Anne Marie Morris), the hospital provides specialist services that benefit the whole of the UK. The provisions on the “Peter Pan” copyright apply to all four nations in the United Kingdom, not just to England and Wales, as some of the other provisions in the Bill do. This hospital provides services that it clearly would not be practical to provide in individual areas and individual hospitals, because that pure specialty is needed. At least one person who has been in my surgery recently has benefited from Great Ormond Street’s work even though they are a resident of Torquay, because of the specialties that the hospital brings.

It is therefore right that we should make this provision that the J. M. Barrie bequest and copyrights can be properly applied, to the benefit of the hospital. It is nonsense to have two charities in place purely because of law that made sense at the time but which now looks like a legal accident, whereby the money has to go into one pot and cannot go into another pot, even though almost any other bequest in this country would be going into the one charity. As has been said, that means that money for patients—money for services—is going to lawyers and accountants. That is not right, which is why the Bill is so timely. It seeks to resolve that anomaly and give that certainty, particularly to Great Ormond Street, and to all the other trusts.

I am very pleased to be here to support this Bill, which will make a real difference. It may sound very technical—it sounded exceptionally technical when I first read it—but it will make a real impact on the ground in providing better services and better outcomes, and helping some of the sickest and most vulnerable people in our society. That is why it is right that the Bill receives its Second Reading. I am delighted that my hon. Friend the Member for Aldridge-Brownhills decided that this subject was the right choice for her private Member’s Bill slot, given the number of choices that would have been available to her, and it is good to see so much support here this morning from hon. Members.

I look forward to hearing what the Minister will say in response to today’s debate—[Interruption.] I am glad he is looking forward to it, too. We are anticipating every moment of his speech, which I am sure will be a tour de force, given his knowledge of this area. We hope it will confirm that giving the Bill its Second Reading makes eminent sense and that it will move into Committee, so that we can turn it from a worthwhile Bill into a worthwhile Act of Parliament. I am delighted to endorse the Bill and I hope the whole House will support it.

--- Later in debate ---

[Mr Rees-Mogg]

I know. The Minister in his seat is looking appalled at that suggestion, but it is true. Many people think that if there is any possibility of the Government getting their grubby paws on a little bit of money, those grubby paws will dart out and the money will be raked in. There is of course a history of Government doing that. For example, hypothecated taxes have been introduced for particular purposes. When the Government run a bit short of money, or find that too much is being paid in the hypothecated taxes, they dehypothecate them—they put them to another purpose. I am thinking of national insurance, which was introduced as an insurance scheme, and of the road fund licence, which was introduced to build our roads. Both of those were syphoned off by Governments, arguably for very good reasons, which I will not go into because they are too broad for this Bill. I merely wish to illustrate the point that charities need to be robust in spending the money on what it has been given for, and not on any other thing, and if they cannot spend it on that which it has been given for, they should give it back to the people who gave it in the first place. The reason that that is important is partly that we believe in the rights of property—this is a Tory Bill. If property belongs to a specific designated purpose then that is what it is there for; it is not there to be used for any random purpose that someone thinks is a good idea at some later stage. There are many good purposes, and there are many charities that some people think do less good things than the good purpose that they have thought up, so there is always pressure to reallocate resources in the way that a Government, or some authority, think is preferable.

[Kevin Foster]

My hon. Friend is bringing his usual fairy dust to this debate. Does he agree that this is about people having confidence in the independence of the trustees, and believing that donations will be used exactly for the purpose of the charity? Furthermore, it is about removing any sense that those donations might be filling in for taxpayer funds.

[Mr Rees-Mogg]

I am extremely grateful for that intervention, because that is exactly the point. It is one of those occasions where rigour really helps. If donors feel that their money will be used properly, they are more willing to give. It is fascinating how charity law has developed in this direction in recent years. Historically, if people gave money to charities, they gave it to the charity for its general purposes. Then they discovered that the general purposes of charities included all sorts of jolly things, such as lunch at the Ritz, so increasingly they have given money for limited purposes, and the funds can then only be spent on those purposes, even within a single charity. For example, if people viewing this debate wish to make donations for the renewal and restoration of this Palace, that money could only be spent on the renewal and restoration of this Palace; it could not be used for other purposes. Charity law has gone that way because it encourages people to give, as they have confidence in how the money will be spent. That is crucial for NHS charities, because there is this large pool of Government money, but it is never quite enough. We hear of deficits, and hospitals and doctors wanting more money, and all of that is a constant pressure on the health service.

--- Later in debate ---

[Antoinette Sandbach (Eddisbury) (Con)]

I am grateful for the opportunity to take part in the debate. I am pleased to follow my hon. Friend the Member for North East Somerset (Mr Rees-Mogg), who spoke with characteristic authority, certainly educating the newer Members, among whom I count myself.

I support the Bill introduced by my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton). She cited the hospital that serves my constituency in Eddisbury, the Alder Hey hospital, as an example of successful independence from the NHS trust. To show how valuable that is, the hospital moved in October to new premises and became Alder Hey in the Park, a brand new £237 million hospital with 270 beds and 16 brand new operating theatres equipped with state-of-the-art technology. It treats 275,000 children across the north-west and north Wales, and is as important a centre for children’s health, medicine and research as Great Ormond Street in London.

The charitable part of Alder Hey became independent in the way proposed by the Bill in April. The charity has contributed £20 million for equipment in Alder Hey hospital, and because it is independent it is separate from the hospital board. In my previous role, I had experience of cases in which the hospital board and the NHS charity were integrated, and in which the charity did not have the independent thinking that is clearly demonstrated by the Alder Hey charity and the other six charities referred to by my hon. Friend in her eloquent explanation of the Bill. It is clearly a vital step for those bigger charities to achieve perceived independence.

[Kevin Foster]

It will be not just independence but the flexibility to bring in different skills and talents that will benefit the charity, its objectives and, ultimately, patients.

[Antoinette Sandbach]

I entirely agree with my hon. Friend. One important step being taken by Alder Hey is in ground-breaking research, and the charity allows it to get funding that will help in those aims.

The new facilities at Alder Hey are extraordinary, designed in part by former child patients. A group of children aged 10 to 22 who had stayed in the hospital contributed towards the design of the new Alder Hey in the Park. I invite Members from across the House to consider visiting the hospital to see the invaluable work that it does. As my hon. Friend the Member for Aldridge-Brownhills said, funding from NHS charities contributes to innovation and research.

--- Later in debate ---

[Antoinette Sandbach]

I am so grateful to the hon. Gentleman for making that point, because health services that my constituents access are affected by decisions taken in Wales. The threat to maternity services in north Wales will have a direct impact on the resources of the county of Cheshire and Leighton hospital, yet they have no say in those decisions—even the hon. Gentleman has no say—because they are taken in Cardiff.

[Kevin Foster]

It is very tempting to go down that path and discuss various issues relating to devolution, but I am conscious, Madam Deputy Speaker, that to do so would not be in order. Does my hon. Friend agree that the benefit of the Bill is that it would make the charities independent so that they can select who is best to be on their board of trustees from the whole area, regardless of politics or boundaries?

[Antoinette Sandbach]

That is precisely why I support the Bill, and it is no doubt why my hon. Friend the Member for Aldridge-Brownhills has attracted support from so many Members today. The crucial matter is independence. Unfortunately, in my previous role I had experiences that went the other way when independence was lacking, and that had a negative impact on outcomes for my constituents.

--- Later in debate ---

[The Minister for Community and Social Care (Alistair Burt)]

I congratulate my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) on securing her place in the ballot and on her speech. This is the NHS (Charitable Trusts Etc) Bill, but it will forever be known as the “Peter Pan and Wendy Bill”, and we shall all do our best to refer to it in that way as we proceed.

I thank colleagues for what they have said during the course of the debate. I welcome the hon. Member for Ellesmere Port and Neston (Justin Madders) to his place and thank him for his brief support for the Bill, which is appreciated.

Those of us who have known my hon. Friend the Member for Aldridge-Brownhills for some years—I think we first knew each other when we were working in Rwanda together—will appreciate that there is a lot of her personality in this Bill: a determination to support the right causes, a fierce and deep commitment to the charitable objectives represented by the NHS, and her usual diligence in introducing the Bill and working very hard to secure support for it and to discuss the issues involved. I thank her very much for the way in which she has done this.

A number of J. M. Barrie quotes are appropriate, and we may hear them during the debates in Committee, if the House wishes to progress the Bill. The one that caught my eye was,

“one girl is worth more than twenty boys.”

I am not sure whether it is currently acceptable to make such a comment from the Dispatch Box, but I use it in its historical context as a sentence from the book, “Peter Pan”. I think that my hon. Friend has well demonstrated her worth in relation to what she has brought forward today.

The hon. and learned Member for Holborn and St Pancras (Keir Starmer), in whose constituency lies Great Ormond Street hospital, made a very decent and correct response to the Bill in which he proudly supported his hospital, as of course he, and we, would wish to do.

[Kevin Foster]

The Minister says “his hospital”. He is obviously right that it is based in the constituency of the hon. and learned Member for Holborn and St Pancras (Keir Starmer), who sadly is not in his place, but it is actually the whole UK’s hospital given the services it provides.

[Alistair Burt]

My hon. Friend makes a point that I would have gone on to make and was emphasised by him and several others. Of course, Great Ormond Street hospital covers not only the areas of London but the rest of the country and, indeed, the world. That is one of the reasons we are so proud to support what my hon. Friend the Member for Aldridge-Brownhills proposes.

My hon. Friend the Member for Newton Abbot (Anne Marie Morris), in supporting the Bill, commented on the history of Barrie, not least making the link with the childhood tragedy of the death of his brother leading to the chain of thought about a young boy living forever, which was certainly in his mother’s mind. My hon. Friend brought us that little bit of tragedy to remind us of the origin of the story.

My hon. Friend the Member for Cheadle (Mary Robinson) concentrated on the technical aspects of the Bill, to which I will turn later in my remarks.

My hon. Friend the Member for Telford (Lucy Allan) raised some of the work done by the local charitable trusts in her area. She spoke of the Friends of the Princess Royal Hospital, Telford and the substantial sums that that charity has contributed to the work of the hospital.

My hon. Friend the Member for Erewash (Maggie Throup) spoke of the League of Friends of Ilkeston Community Hospital and Treetops Hospice Care. She reiterated the point that although we have an almost uniquely taxation-based system of support for the health service in this country, that does not completely absolve people from the desire to make their own contribution to hospitals in a charitable manner, as they do in extraordinary ways.

--- Later in debate ---

[Kevin Foster]

The Minister is making an excellent speech, as predicted during my own speech. Does he agree that the core issue is that charitable funds are not just giving extra to patients in the NHS, but going beyond what would be funded by the NHS? This is not about replacing taxpayers’ money; it is about giving that extra boost and extra bonus.

[Alistair Burt]

It is about exactly that. In a world of never-ending resources, there would be no need to look for charitable funding. As I have said, charitable funding covers not just finance but the instinct to give and support. Even if it was not about finance, plenty of people are able to support their local communities and local hospitals, not because they contribute financially, but because they give their time. Leagues of friends and others are perfect examples of that instinct.

My hon. Friend the Member for Stafford (Jeremy Lefroy) spoke characteristically succinctly about charities making a real difference in his hospital and health community. My hon. Friend the Member for North East Somerset (Mr Rees-Mogg) made a vigorous defence of the private Member’s Bill as an example of Conservative principles and values. I am not sure whether he wanted to convey that a vigorous defence of fundamental Conservative principles is best and appropriately summed up in a Bill about Peter Pan and Neverland. Perhaps he recognised that those principles are reflected in the fact that the most successful example of the genre is everlastingly popular. I am sure that is exactly what my hon. Friend meant to convey.

Members can imagine my shock at my hon. Friend’s suggestion that an anonymised, bureaucratic element in the NHS might be pursuing a seemingly puzzling and unnecessary course of action to add to bureaucratic difficulties. Although I do not necessarily recognise the exact unit of which he speaks, I will look into his concerns, just in case it can be identified.

My hon. Friend the Member for Eddisbury (Antoinette Sandbach) spoke of the contribution of Alder Hey hospital, which was also welcomed and supported by the right hon. Member for Knowsley (Mr Howarth). My hon. Friend spoke of the new hospital and the charity work being done there. I am sure that most Members present would wish to recognise her contribution to a debate earlier this week in very different circumstances. She was immensely brave and her remarks will no doubt lead to much good. In today’s debate, she pointed out that charities can make a contribution to the running of even the best known hospitals.

Finally, my hon. Friend the Member for Bury St Edmunds (Jo Churchill), who had a personal reason for her particular interest in the Bill, referred to this country’s extraordinary pioneering work in medicine. That was exemplified by the news just this morning of genetic editing and the happy outcome for one little girl in particular. That reminds us of this country’s extraordinary reputation in medicine and medical research, and of the work of medical academics and all other health professionals. Every day we are appreciative of everything they have done for and contributed to this country’s reputation.

--- Later in debate ---

[Alistair Burt]

My hon. Friend makes a very important point about the community’s engagement and the way in which it can work with existing health services. The renewed attention paid to mental health will provide many further such opportunities.

[Kevin Foster]

The Minister is being exceptionally generous in giving way to colleagues. Given the rapidly ageing population, which means that there are likely to be more demands on services because of age-related illnesses, does he agree that the Bill is very timely? That is particularly true in a ward in my constituency where 9% of the entire population is aged over 85.

[Alistair Burt]

My hon. Friend makes a significant point about the use of the health service and the relationship of charities to its work. I am sure that many of us have similar contributions in mind. I appreciate how the Bill brings those two things very closely together.

I think it would help the House if I made some progress on the technicalities of the Bill. As I have mentioned, the Bill delivers commitments announced by the Government in response to the consultation on the “Review of the regulation and governance of NHS charities”, published in March 2014. Charities were given the opportunity to seek greater independence under the sole regulation of the Charity Commission, so removing themselves from dual regulation under NHS legislation and charity law. Six NHS charities have converted to become independent and others are progressing towards independence.

The Government response to the consultation made it clear that, given the new freedom for NHS charities to become independent, the Secretary of State’s powers to appoint trustees were no longer necessary and that they would be revoked as soon as possible once a legislative vehicle became available. This Bill is that legislative vehicle. It completes the reform of the regulation and governance of NHS charities, and it delivers the Government’s commitment to repeal the Secretary of State’s powers to appoint trustees to NHS bodies that hold charitable property.

The Department of Health has stated that it will not appoint trustees to any further bodies that are not already named in existing trustee appointment orders. It will, however, continue to enable the replacement of trustees for NHS bodies that currently have Secretary of State-appointed trustees until the appointment powers are repealed. The Department has said that the provisions removing the Secretary of State’s powers, if the Bill passes into law, would be brought into force in April 2018. That will allow charities with trustees appointed by the Secretary of State a generous period of grace in which to decide whether to become independent or to revert to corporate trustee status with the board of the NHS trust or NHS foundation trust as the trustee.

The Bill confers powers on the Secretary of State to make regulations to transfer charitable property from the trustees of an NHS trust or NHS foundation trust to the trust itself. This power will enable the Secretary of State to ensure that, prior to the repeal of his powers to appoint trustees, any trust property held by trustees can be transferred back to the trust to which the trustees were appointed. It is hoped that all charities with trustees will have resolved their future status, either by becoming independent or by reverting to corporate trustee status, before the Secretary of State’s powers are revoked so that the powers will not be needed.

The Bill amends the provisions of the Copyright, Designs and Patents Act 1988, which conferred in perpetuity the rights to royalties, and other remuneration as agreed, from the play “Peter Pan” on the special trustees appointed by the Secretary of State for Great Ormond Street hospital. J. M. Barrie’s gift of the rights to “Peter Pan” has provided a significant source of income for the charity. I do not want to linger for too long on “Peter Pan” because we have said quite a bit about it, but in deference to my granddaughter, who may be watching this debate, I wanted to mention that I am proud to be able to take this Bill through its initial stages and, hopefully, beyond.

The quality of the gift provided by J. M. Barrie has been mentioned by others. It was an almost unique charitable gift. I hope that through our talking about it, others will be encouraged to do the same. There are many generous benefactors from show business and the business and economic community, but to provide an endowment to a hospital in the manner that J. M. Barrie did was remarkable. He was a remarkable individual. I think that colleagues in the House know a little more about him now than they did before the debate. One of the quotations that is worth leaving with colleagues is:

“When a new baby laughs for the first time a new fairy is born”.

I suspect many of us have had the pleasure of saying that to our own children and grandchildren. This is an appropriate opportunity to discuss such issues.

Great Ormond Street Hospital Children’s Charity was eager to take the opportunity to become independent. It became partially independent on 1 April 2015. It is, however, unable to complete its conversion to an independent charity because the original NHS charity has to be kept in existence until the Copyright, Designs and Patents Act 1988 is amended, so as to avoid its statutory rights to the “Peter Pan” royalties being lost. The Bill will confer those rights on the new independent charity for Great Ormond Street hospital.

Retaining the original NHS charity causes a number of complications for Great Ormond Street Hospital Children’s Charity. Most significantly, running the two charities side by side creates a risk that legacies to the charities may fail. It also duplicates the governance arrangements, requires the production of separate accounts and may require the submission of duplicate returns to the Charity Commission.

Transferring the rights to “Peter Pan” also clears the way for removing the Secretary of State’s powers to appoint trustees to NHS charities. The Government will not remove those powers until such time as Great Ormond Street Hospital Children’s Charity no longer needs its Secretary of State-appointed trustees to receive royalties from “Peter Pan”.

In considering this Bill, the House needs to reflect briefly on the evolution of NHS charity legislation. Charities played a key role in the provision of healthcare before the NHS was created. In the years before 1948, people relied on a mixture of charitable provision and some limited national and voluntary insurance schemes. Prior to the NHS, many hospitals and other healthcare services were organised on a charitable basis, with their property and assets held in charitable trusts.

On the appointed day, 5 July 1948, the NHS took control of 480,000 hospital beds in England and Wales. The National Health Service Act 1946 transferred virtually all existing voluntary hospitals to the Minister of Health. The effect was that property previously held in clear charitable trusts for a hospital ceased to be charitable property. The 1946 Act also gave hospital boards the power to accept on trust further charitable property, such as donations. It gave the Minister of Health the power to appoint a hospital board as the trustee to hold charitable property for charitable purposes. The structure of the NHS has changed many times since the 1946 Act, but NHS legislation has always ensured that NHS bodies have the power to receive, hold and deal with charitable property.

NHS charities are characterised by the fact that they are bound both by charity law and their statutory objectives set out in NHS legislation, as well as by the fact that the Secretary of State has the power to appoint and remove trustees. NHS charities are linked directly to NHS bodies. In addition to raising funds, they have a special role as the charities that automatically receive money donated by members of the public to the NHS or to their linked NHS bodies. The NHS bodies that can hold charitable property are NHS trusts, special health authorities, foundation trusts, clinical commissioning groups and NHS England.

The statutory objectives of NHS bodies are derived from NHS legislation. They can hold property on trust both for the purposes of their linked NHS body or for any purposes relating to the health service. In reality, the vast majority of funds are held by charities linked to an NHS trust or foundation trust. They therefore hold property both for the purpose of their linked trust and for the purposes of the health service more generally.

As my hon. Friend the Member for Aldridge-Brownhills said, as at March 2015, there were about 260 NHS charities with a combined income of about £320 million and assets with a value of £2 billion. There is considerable disparity in size across the sector, with income heavily skewed towards charities linked to large, high-profile hospital trusts. At the time of the consultation in 2012, the top five NHS charities accounted for a third of the total income and the top 30 for over two thirds. That is why a concentration on smaller charities, such as those that have been mentioned by colleagues today, is so important.

The default position for an NHS charity is the corporate trustee model, whereby property held on trust is held by the NHS body itself, acting as a corporate trustee. The directors of the NHS body act collectively as a trustee for charitable property. The members of the board of the NHS body are not, individually, the trustees of the charity. NHS bodies acting as a corporate trustee are required, under charity law, to act exactly as an independent trustee would—that is, solely in the interests of the charity and its beneficiaries. The vast majority of NHS charities use the corporate trustee model. As at March 2015, of around 260 NHS charities, more than 90% had corporate trustees.

NHS legislation makes provision for the Secretary of State to appoint trustees for NHS bodies, and those appointed trustees carry out the trustee function in respect of that body’s charitable property. Trustees appointed by the Secretary of State have powers to hold trust property on the same terms as NHS bodies. Once in post, the trustees are answerable to the Charity Commission and not their linked NHS body.

The right hon. Member for Knowsley raised a potential issue in respect of the independence of charities and asked whether this provision would in any way deflect them from their other responsibilities. I assure him that that is not the case. Charitable law will still apply. They will still be regulated, but solely under charity law by the Charity Commission. That reduces the administrative burden and cost, and the calls on the time of the charity’s staff, but it does not weaken the essential controls. I hope that I have reassured him.

NHS legislation does not stipulate the circumstances in which such trustees should be appointed. The Department’s policy has been to establish bodies of trustees only where the charity holds such significant assets that it justifies the engagement of people with relevant expertise. The most recent Department of Health guidance, which was issued in 2011, said that assets of more than £10 million and an annual income or expenditure of £l million would provide a clear case for the appointment of separate trustees.

As hon. Members have mentioned, issues of charitable control are very much in the minds of the House at the moment and, I suspect, will continue to be so as we look into the background of Kids Company. It is important that when trustees are appointed, the importance of their role and the duties they have to perform is recognised. There should be extreme caution about appointing people to boards just for the sake of it, now more than ever.

[Kevin Foster]

There has been a National Audit Office report on Kids Company and I believe that the Public Administration and Constitutional Affairs Committee is looking into it. This Bill is about ensuring that the charities affected have the freedoms and benefits that all other charities have. There is a wider discussion to be had, perhaps at another time, about how charities should be structured to ensure that they operate appropriately and have good corporate governance.

[Alistair Burt]

That is absolutely right. The House will be pleased to know that I do not intend to go further down that road. In the context of recent discussions, it is important to ensure that the misuse of charitable funds is the exception to the rule. It is important that people retain confidence and faith in what charities do. That is why it is important to have a rigorous examination whenever allegations are made about things being wrong. In the NHS, such confidence is vital.

In practice, the Secretary of State has delegated his responsibility for making trustee appointments to NHS bodies to the Trust Development Authority, which is a special health authority. In addition to having powers to appoint trustees to an NHS body, the Secretary of State retains powers under NHS legislation to appoint special trustees for certain university hospitals or teaching hospitals. Those special trustees have narrower objectives than other NHS trustees. The special trustees’ objectives are limited to holding property on trust mainly or wholly for the hospital for which they are appointed, or for any other part of the NHS associated with hospitals. In contrast, all other NHS trustees may hold property for any purposes relating to the health service, as well as for the purposes of their linked NHS body.

As the House has heard, following the Government’s response to the consultation, there is now a process for NHS charities to convert to independent status. NHS charity trustees need to assess how they see the NHS charity’s future in order to decide whether or not to convert. There are a number of advantages to conversion. An independent charity’s liability can be limited. One main issue with the current position is that trustees appointed by the Secretary of State risk unlimited personal liability, and that can impact negatively on moves to attract new trustees with the relevant experience and expertise. Moving to independence allows trustees to form structures, such as limited liability companies that provide them with limited liability, thereby enabling them to tackle more significant and innovative projects.

Furthermore, in the eyes of a potential donor, an NHS charity can be seen as too close to Government. Experience has shown that donors—especially major donors—can be reluctant to give if they think the charity is simply seeking money that could or should be provided by the Exchequer. Some grant-giving charitable foundations will not entertain applications from NHS charities simply because of their connection to Government. An independent charity is able to adopt wider charitable purposes in respect of funds raised after it has become independent, and enter into more innovative fundraising initiatives, collaborations and mergers.

Independence removes the need for the charity to comply with NHS legislation, and enables it to be regulated solely under charity law by the Charity Commission. That reduces the administrative burden, costs and calls on charity staff time. It also removes the need to be tied to the “Agenda for Change” pay structure. “Agenda for Change” was not designed for charities and for some it hampers their recruitment of suitable staff at an appropriate salary.

There are, however, some drawbacks to converting to independence and some costs to conversion. There may be additional costs to being an independent entity, some minor VAT disadvantages, and the NHS body may fear a loss of influence over its charity. Each set of trustees has to decide what is best—whether to convert to independence or have corporate trustee model arrangements. Conversion involves the creation of an independent charity outside the NHS. As my hon. Friend said, conversion to independent status involves the creation of a new charity, usually in corporate form, either as a company limited by guarantee or a charitable incorporated organisation in relation to which Secretary of State has no powers. Alternatively it could involve the transfer to the new charity of all the charitable property of the NHS charity, or the winding up of the NHS charity.

The relationship between the NHS body and the independent charity is important. The conversion process requires a formal agreement, or memorandum of understanding, to be in place. The content of that is to be decided between the parties, but there must be a binding obligation on the NHS body to transfer all charitable donations it receives to the independent charity. The Department is also of the view that the NHS body should have some involvement in the new charity’s governance arrangements, for example by having a specific place on the board. That is because of the commitment for all future donations to be transferred to the independent charity, and because the independent charity’s objectives will continue to relate to the NHS.

The independent charity’s governing instrument—such as articles of association or its constitution—must ensure that the existing objects of the independent NHS charity are the same as those applying to the funds transferred from the former NHS charity. It will, however, be possible for the independent charity to have wider objects for new funds raised after independence. Prior to completion of the conversion, the Department must be satisfied with the final memorandum of understanding, and see evidence that the NHS body’s board has considered and approved the conversion.

As the House has already heard, five NHS charities with appointed trustees have converted to independent status: Barts Charity, Alder Hey Children’s Charity, Guy’s and St Thomas’ Charity, Birmingham Children’s Hospital Charity and Great Ormond Street Hospital Children’s Charity. Of the 16 remaining charities with appointed trustees, six have formally notified the Department that they are converting to become independent, one has formally decided to revert to corporate trustee status, and the other nine are at various stages of deciding the best way forward. One NHS charity with corporate trustee arrangements, Royal Brompton & Harefield Hospitals Charity, has already converted to independence, and Yeovil District Hospital NHS Foundation Trust charitable fund has notified the Department that it has decided to convert to independence—my hon. Friend the Member for Yeovil will know it well. The Department is aware of other charities with corporate trustees that are actively considering conversion to independence.

In summary, the Government have listened to the NHS charities and given them what they asked for. NHS charities can, if they so choose, do away with dual regulation, and gain greater independence under the sole regulation of the Charity Commission. Alternatively, they can have corporate trustee arrangements that provide a tried and tested means of managing charitable funds. This Bill makes good on the Government’s decision to repeal the Secretary of State’s powers to appoint trustees to NHS bodies. They are no longer needed. It also provides powers for the Secretary of State to transfer, by regulations, property from the appointed trustees to their linked trust, if any Secretary of State-appointed trustees are still in place when those powers are repealed.

The Department of Health has told the NHS that the powers to appoint trustees would not be revoked before April 2018, to provide a period of grace for trustees appointed by the Secretary of State to decide the most appropriate legal form for their charity in future. As we have extensively discussed, the Bill amends the Copyright, Designs and Patents Act 1988 to provide for the right in perpetuity for royalties from the play “Peter Pan” to be conferred on Great Ormond Street Hospital Children’s Charity. This Bill will enable the charity to complete its conversion to full independence.

I appreciate the points that have been made today and the way that the House has handled the Bill, and many colleagues have contributed. The Government are supportive of the Bill’s intentions, not because it delivers what we want, but because it helps to deliver the model and freedom that charities themselves have asked for.

I will conclude with one final quote from J. M. Barrie—[Interruption.] It is a final quote:

“Those who bring sunshine into the lives of others cannot keep it from themselves”.

Those of us who know my hon. Friend the Member for Aldridge-Brownhills, will know that that is certainly true about her, and I commend her Bill to the House.