Policy background Reform of NHS Charities
A number of the largest NHS charities called for reform of NHS charities because of concerns that the NHS legislative framework limited the charities’ freedom to grow and develop their charitable activity to best support their beneficiaries. For example, the Secretary of State appointing the trustees made it difficult to demonstrate visible independence from government in the eyes of potential donors. Being bound by NHS legislation prevented the charities adopting different legal forms appropriate to their specific needs, in particular those offering limited liability. The Charity Commission also believed that dual regulation under both NHS and charity legislation made it difficult for NHS charities to achieve and demonstrate independence.
	As a result of these concerns, the Department of Health conducted a review of NHS charities in 2011, consulting publicly on its proposals in 2012. In the response to the consultation published in 2014, the department announced the intention to allow NHS charities to move to independent charity status. Charities that decided to become independent would no longer be NHS charities, but independent charities, regulated solely by the Charity Commission, and responsible for appointing their own trustees. The Department of Health put safeguards in place to preserve the unique relationship between the charities and the trusts they are associated with. The funds that are transferred to the new charity can only be used for the same charitable purpose as originally intended; and the NHS body should have some involvement in the new charity’s governance arrangements, for example having a specific place on the board. The Department of Health and the Association for NHS Charities have published detailed guidance for charities on the policy.
	The Department of Health stated in its response to the consultation that given this new freedom for NHS charities to become independent, the Secretary of State’s power to appoint trustees was no longer necessary. The Department of Health stated that "where trustees have been appointed by the Secretary of State, the provisions for these appointments will be repealed as soon as possible, and any such arrangements would fall away". The Department of Health has said that it will not compel NHS charities with trustees appointed by the Secretary of State to go through the process of setting up an independent charity, as they have the choice of reverting to the NHS body acting as corporate trustee if they so wish.
	The Department of Health stated that it will not appoint trustees to any further NHS bodies that are not already named in the existing trustee appointment orders, but will continue to enable the replacement of trustees for those who currently have Secretary of State appointed trustees, until the trustee appointment powers are repealed.
	This Act, therefore, provides for the powers of the Secretary of State to appoint trustees for NHS bodies and to appoint special trustees (in England) to be repealed , and makes related and consequential provision.