Last week, the NHF published its final version of its new Code of Governance and made some important changes from the previous draft that will impact on those housing associations looking to adopt it.
In the recent case of Derby Teaching Hospitals NHS Foundation Trust and others v Derby City Council and others, 2019 EWHC 3436 Ch, Morgan J ruled against the NHS Trusts and found they were not charities for the purposes of the Charities Act 2011 (“the 2011 Act”) and the Local Government Finance Act 1988 (“the 1988 Act”). Aside from saving local authorities an estimated £1.5 billion in business rate reductions, the implications are widespread.
The claim of Derby Teaching Hospitals NHS Trust Foundation Trust (“Derby FT”) alone was worth more than £17 million. To claim the mandatory rate reduction, and subsequent repayment of business rates paid over the previous six years, Derby FT needed to be a charity, whose property is wholly or mainly used for charitable purposes. Section 67(10) of the 1988 Act defines a charity, for the purposes of business rates, as either:
- an institution or other organisation established for charitable purposes only; or
- any persons administering a trust established for charitable purposes only.
The primary purpose of all Foundation Trusts is the provision of goods and services for the purposes of the health service in England, under the National Health Service Act 2006. Whilst this is a charitable purpose, falling under ‘the advancement of health and saving lives’, the Foundation Trusts also had two additional purposes. Under section 43(2) of the National Health Service Act 2006, these related to:
- the provision of services provided to individuals for or in connection with the prevention, diagnosis or treatment of illness; and
- The promotion and protection of public health.
As such, Foundation Trusts may pursue other purposes as long as they are connected with the purposes in section 43(2), with no requirement that those purposes had to advance public health. However, the additional purposes could fall outside of the 2011 Act, thus would not necessarily be charitable.
The Court held that the purposes of Foundation Trusts, as prescribed by the National Health Service Act 2006, were not limited to only charitable purposes. Therefore, Foundation Trusts could not be considered charities for the purposes of the 1988 Act or benefit from business rates relief.
We will be exploring the impact this decision has on charities and local authorities in a series of short articles.
For more information
Please contact Emma Watt.
As the end of 2020 beckons, we take a look at what progress the Sterling market has made in its preparations for the end of the London Interbank Offered Rate (LIBOR) on 31 December 2021.
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For part 1 in this series of short podcasts, Chris Lloyd-Smith interviews solicitor Puja Desai on how she has been coping during these unprecedented times.
Over 100 trainees and future trainees from Birmingham joined the BTSS for a webinar to address concerns around training remotely and qualifying during a possible recession.
Anthony Collins Solicitors has supported Birmingham-based Complete Care Holdings in its acquisition of Amegreen Complex Homecare Ltd.
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