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Healthwatch organisations registering as charities: principles and guidance
What are Healthwatch organisations?
The Health and Social Care Act 2012 amends the Local Government and Public Involvement in Health Act 2007 to make provisions about local Healthwatch as the consumer champion for health and social care services.
Local Healthwatch will replace Local Involvement Networks (LINks) carrying forward the LINks functions whilst taking on new additional functions.
The structure for Healthwatch organisations
Local Healthwatch will be established as social enterprises. They may take a variety of forms and some of them may be established as charities. A body is a charity if it: • is set up under the law of England and Wales; and • is established for exclusively charitable purposes only. 'Charitable purposes' are those that fall within the descriptions of purposes capable of being charitable set out in the Charities Act 2011 and that are for the public benefit. The public benefit requirement means that, to be a charity, an organisation must be able to demonstrate that it is set up for aims that are capable of being charitable, and that its aims are, and will be, carried out for the public benefit. It is a requirement that applies to each of an organisation's aims. A charity cannot have some aims that are for the public benefit and some that are not. The regulation of Healthwatch organisations which are charities The Charity Commission registers and regulates charities in England and Wales. If a local Healthwatch is established in England to operate as a charity, meets the requirements set out above and has gross annual income of at least £5000 it must register with the Charity Commission.
A charity regulated by the Charity Commission for England and Wales must operate to further wholly charitable purposes and to meet the requirements set out in the Charities Act 2011.
There is more information about the Charity Commission’s role in the regulation of charities available from our website here:
If a Healthwatch organisation applies to the Charity Commission to register as a charity the Charity Commission will make a decision about the charitable status of that organisation based on the application and supporting material provided.
Starting up a charity
There is guidance on the Commission’s website about starting up a charity and applying to register a charity here:
The different structures for a charity are described in our guidance in CC22 ‘Choosing and preparing a governing document’, here:
Some Healthwatch organisations may also wish to consider the new Charitable Incorporated Organisation (CIO) model for a charity which will be available from December 2012. Information about the CIO is available here:
The Commission offers model governing documents which contain all of the relevant provisions for the operation of a charity and these are available free of charge from our website here:
Applications for charity registration are made on-line. The registration process is described here:
A charity is established with a body of trustees who are the people responsible for the general control and management of the administration of a charity.
An application for charity registration includes the details of the trustees and a signed trustee declaration in which they confirm that they are willing and eligible to serve.
The charity's governing document sets out how trustees are to be appointed. All trustees, however appointed, must act in the charity's interests, and must not represent the interests of any outside organisation or their own personal interests. We expect to see an independent body of trustees whose appointment is consistent with the provisions of the governing document and that any potential conflict of interest can be properly managed.
Our published guidance in CC3 ‘The Essential Trustee’ gives further information here:
The purposes of a charity
The objects clause in the governing document of a charity must express exclusively charitable purpose(s) falling within the descriptions of charitable purposes in section 3 of the Charities Act 2011 (the 2011 Act). Our published ‘Guidance on Charitable Purposes’, available from our website at the link below gives more information about charitable purposes:
On the basis of the information we have seen from the Department for Health about Healthwatch organisations established under the Health and Social Care Act 2012, those that are charitable would have purposes which are:
(a) the advancement of health and;
(b) the relief of need.
Relief of need is a broad charitable purpose. We understand the scope of the social care aspects of the work of Healthwatch organisations to cover assistance to people who have charitable needs related to their age, ill- health, disability or financial hardship. A charity cannot have some aims that are for the public benefit and some that are not. The work of a charity may only further the charitable purposes set out in its governing document. If a Healthwatch is to be a charity it may only work to further those purposes and it must limit its activities to those which will advance those purposes. Example object for a charitable Healthwatch
The charitable purposes of a charity are set out in the objects clause of its governing document. The object clause for a charitable Healthwatch organisation looks like this:
The advancement of health and the relief of those in need by reason of youth, age, ill-health, disability or financial hardship by:
(a) Providing information and advice to the general public about local health and social care services; (b) Making the views and experiences of members of the general public known to health and social care providers; (c) Enabling local people to have a voice in the development, delivery and equality of access to local health and care services and facilities and; (d) Providing training and the development of skills for volunteers and the wider community in understanding, reviewing, scrutinizing and monitoring local health and care services and facilities.
Including the means to deliver the purpose(s) at sub clauses (a) to (d) will guide the charity in its activities. The trustees need to be satisfied that the range of means described properly reflects the scope of the operation of the charity and that any additional means are consistent with charitable status.
We would expect to see this wording at the objects clause of the governing document of any Healthwatch applying to register as a charity.
A charity must operate to further its charitable purposes for the public benefit. There is further information about the public benefit requirement available from our publication ‘Charities and public benefit’, available from our website here:
Our guidance sets out the two main principles of public benefit:
1. There must be an identifiable benefit or benefits; 2. Benefit must be to the public, or a section of the public.
We understand that Healthwatch organisations will deliver contracted services. Any application to register a Healthwatch organisation as a charity will need to explain the range of those contracted services and their potential benefits so that we can see that they are all directed to furthering the purposes of the Healthwatch organisation and that those purposes are all charitable.
Local care services comprise local NHS services and local social services which are very broad based statutory functions and may not all be charitable. A Healthwatch organisation which wishes to be a charity must be able to limit its activities to promoting only charitable purposes.
Independence of Healthwatch
Healthwatch organisations are to deliver contracted health and social care services for local authorities. Charities are required to be independent in the way that they operate. Charity trustees may enter into a funding agreement with a government authority only if:
• The agreement does not require the charity simply and only to implement the policies, or carry out a statutory duty, of the government authority; • The agreement does not involve a surrender of the trustees’ discretions to the government authority; • The terms of the agreement coincide with the way that the trustees want to exercise their discretions.
In return for the funding, the local authority may require the Healthwatch to agree terms as to the minimum level of service provision and standard of performance, financial reporting requirements and other matters.
The Healthwatch (its trustees) must be free to operate the Healthwatch and provide its services. Any conditions and requirements set out in the funding agreement or arrangements with the funding local authority should not compromise its independence in deciding how to provide those services.
The Healthwatch must be responsible for decision making in its operation and management (including financial management). This includes but is not limited to: • Operation of the Healthwatch • Planning and development • Policies and objectives • Form of services • Selecting beneficiaries • Internal financial control and management • Management and control of budget in providing service. • Staffing
To ensure that Healthwatch organisations retain sufficient independence to make the type of decisions set out above, the funding agreement or other contractual arrangements with the local authority should detail the broad principles and define, as a baseline, the minimum level of provision expected, rather than seek to fetter the trustees’ decision and discretion. The standards of service set out should not restrict the trustees in such a way that the Healthwatch is obliged to accept the decisions or directions of the local authority, or implement its policies, or pursue its objectives in delivering the purposes of the Healthwatch.
It is however possible for Healthwatch trustees to accept funding on terms that are quite prescriptive. There are some decisions which are made once- and-for-all at the outset of a funding agreement. If trustees are satisfied that the terms negotiated coincide sufficiently with the way that they want to pursue their charitable purposes, they can properly accept funding on those terms. In these circumstances, and where the restrictions are linked to the funding being provided or to the delivery of the service being funded, there would be no surrender of discretion.
The purposes of a charity may coincide with those of a local authority but a charity must be independent. This is explained in detail in our guidance in RR7 ‘Independence of charities from the state’, available from our website here:
An application to register a Healthwatch as a charity will need to confirm that the operating relationship with the governmental authorities at national level (DfH, Healthwatch England, Care Quality Commission) and at local level in its area of operation demonstrates independence, including reference to these characteristics.
We understand that Healthwatch England will be a national platform to influence national bodies such as the regulators and the NHS Commissioning board. Local Healthwatch will work alongside Healthwatch England. At a local level, the Healthwatch model will ensure that the views and experiences of patients, carers and other service users are taken into account when local needs assessments and strategies are prepared. It appears that Healthwatch organisations may have a purpose to influence public policy both nationally and locally. Our published guidance in CC9 ‘Speaking Out’ explains that campaigning and political activity (as defined) can be legitimate and valuable activities for charities to undertake, but may only be undertaken by a charity in the context of supporting the delivery of its charitable purposes: http://www.charitycommission.gov.uk/Publications/cc9.aspx#2 Our guidance explains that a charity cannot exist for a political purpose, which is any purpose directed at furthering the interests of any political party, or securing or opposing a change in the law, policy or decisions either in this country or abroad. We will need to see assurances or evidence to show that any role of a Healthwatch local organisation in influencing public policy at local or national level is wholly directed to supporting the delivery of its charitable purposes. Healthwatch organisations applying to register as charities
Healthwatch organisations established as charities may apply for registration by the Charity Commission. That application will be made on- line using the process described on the Commission’s website and will include:
• An executed governing document suitable for a charity and containing exclusively charitable objects for the pubic benefit. The model wording set out above meets that requirement; • Confirmation that the trustees have considered these principles and the linked guidance and that in their capacity as charity trustees they will ensure that any funding or contractual arrangements negotiated for the operation of the Healthwatch will be consistent with its status as a charity. Model wording for a trustee statement is set out below; • A copy of the service specification or tender document describing the scope of services to be provided; • The requirements for registration set out in the Commission’s published guidance.
The Charity Commission will use its best efforts to process all applications within published timescales. Applications which deviate from the scope set out in these guidelines may take longer to consider.
END Healthwatch charities: applications for registration with the CharityCommission
1. We have considered and have regard to:
a) The principles and guidance for Healthwatch charities;
b) Charity Commission guidance RR7 ‘The Independence of Charities from the State’;
c) Charity Commission guidance CC3 ‘The Essential Trustee’;
In developing the terms of the following documentation:
• Governing document • Service specification
2. In accordance with the principles and guidance available from Healthwatch charities and our duties as charity trustees we confirm that:
a) The terms of any arrangements with governmental authorities coincide sufficiently with the way in which we wish to pursue our charitable purposes;
b) The terms of those arrangements or our work alongside those authorities will not interfere with our decision making;
c) Any terms negotiated will be in the best interests of the beneficiaries of our Healthwatch;
d) Any terms negotiated will be consistent with the furtherance of our stated charitable purposes.
3. We have taken independent legal advice regarding the terms of agreements.
Signed on behalf of Healthwatch (location) …………………………………………….
Signed on behalf of Healthwatch (location) : …………………………………………….