The legacy of voluntarism: Charitable funding in the early NHS

Before 1948, approximately one-third of the United Kingdom (UK)’s hospital beds were located in voluntary hospitals, many of which continued to benefit from the funds generated by their historic endowments. When the National Health Service (NHS) was created, the vast majority of these hospitals were taken over by the State. This paper examines the neglected question of what happened to these endowments and the role which charity continued to play in the funding of NHS hospitals more generally. It makes an explicit attempt to examine the development of hospital services in each of the UK’s constituent nations and shows how the treatment of endowments and the role of charity differed between them. It also highlights the continuing importance of arguments over the ‘boundaries’ between ‘essential’ and ‘non-essential’ forms of health service expenditure, and between the roles of the statutory and voluntary sectors more generally.

might play. 1 However, both inherited endowments and new gifts and donations continued to play a small but significant part in the financing of statutory health services. These funds were supposed to be used to support the provision of amenities for patients and staff and for research but could also be used more widely.
Despite this, the role of charity received very little attention from some of the earliest historians of the NHS, such as Ross, Eckstein, and Willcocks, although Dodd addressed the issue in a report for the British Hospitals Contributory Schemes Association in 1960. 2 It also received limited attention from Watkin,Pater,Honigsbaum,Rivett,Webster,Ham,and Klein,3 and only passing references in Brotherston et al. and McCrae's histories of Scottish healthcare. 4 It received rather more attention from Prochaska, in his history of the King's Fund, but his account was largely confined to the provision of healthcare in England and Wales, and it was also addressed by Mohan and Gorsky, although their work focused more closely on the role played by voluntarism before 1939 and after 1980. 5 Gray provided a fuller account of issues associated with the treatment of hospital endowments in her history of the Northern Ireland Hospitals Authority (NIHA). 6 During the 1990s, the Directory of Social Change published a series of more polemical accounts and Meakin provided a painstaking legal discussion, but these works also had a more recent focus. 7 The issue of charitable funding in the NHS has also received relatively little attention from historians of philanthropy. Prochaska said very little on the topic in either The voluntary impulse or in his contribution to the Cambridge Social History of Modern Britain, although he did highlight the introduction of restrictions on hospital fundraising in Christianity and social service. 8 Trevelyan described the role played by voluntary service in the first 3-4 years of the NHS, and Owen provided a brief account of some of the differences in the treatment of teaching and non-teaching hospitals. 9 Finlayson noted that 'Bevan's proposals were laced with a considerable number of concessions to the voluntary hospitals such as . . . the protection of hospital endowments'. 10 However, neither Owen nor Finlayson made any reference to the Hospital Endowments Fund (HEF) and, although Owen acknowledged the persistence of other kinds of 'free money', neither he nor Finlayson referred to the development of different arrangements outside England and Wales. 11 The role of charity during the first 30 years of the NHS has received renewed attention more recently. Ramsden and Cresswell explored the contribution made by voluntary organizations to the development of first-aid services; Piggott discussed the role played by religious communities in the preservation of 'Hospital Sunday'; and Millward examined the roles played by Leagues of Friends in the west Midlands. 12 However, none of these papers looked at the contribution of charitable funding more broadly. Other writers have focused on more recent developments. Stewart et al. examined the rise of crowdfunding during the coronavirus disease 2019  pandemic and Stewart and Dodworth explored a range of fundraising practices in contemporary Scotland. 13 Bowles et al. surveyed the contribution of charity to the income of contemporary NHS Trusts In England and Abnett, Bowles, and Mohan discussed the different ways in which these funds have been used. 14 However, all of these papers are primarily concerned with the present day.
This paper adopts a different approach by examining the contribution made by prewar endowments and subsequent gifts to the financing of hospital services during the NHS's first quarter-century. It looks at what happened to the distribution of the voluntary hospitals' existing endowments after 1948 and integrates this into the broader history of non-Exchequer health service funding. In contrast to much work on the history of the 'British' NHS, it takes an explicitly 'four-nations' approach to developments across the whole of the UK. It demonstrates that charity continued to play a small but significant role in the mixed economy of healthcare after 1948 and highlights the questions this raised about the distinctions between 'essential' and 'non-essential' forms of health expenditure and the boundary between voluntary and statutory responsibility.
The period between 1948 and the early 1970s marked a distinctive era in the history of healthcare in each of the UK's health services. It began with the establishment of the NHS in England and Wales, Scotland, and Northern Ireland on the 'appointed day' of 5 July 1948 and ended with a series of changes in the management of charitable funding and the organization of health services more generally. 15 In England and Wales, both the HEF and the separate status of the majority of teaching hospitals were abolished following the reorganization of the NHS in 1974. 16 In Scotland, a new body, the Scottish Hospitals Trust (SHT), was established to administer hospital endowments in 1971, and the health service itself was reorganized 3 years later. 17 In Northern Ireland, Belfast's Mater Infirmorum Hospital became part of the statutory health service in 1971 and the NIHA was replaced by four health and personal social service boards in 1973. 18 Although charitable finance makes only a small contribution to overall health spending, it has received more attention in recent years. In 2016, a charity fundraiser, Bevis Man, argued that NHS Trusts 'are now more in need of NHS charities to contribute towards major redevelopment 12 Ramsden and Cresswell, 'First aid and voluntarism'; Piggott, 'Hospital Sunday'; Millward, 'Its many workers and subscribers'. 13 Stewart, Nonhebel, Möller, and Bassett, 'Doing "our bit"'; Stewart and Dodworth, 'The biggest charity you've never heard of'. 14 Bowles, Clifford, and Mohan, 'The role of charity in a public health service'; Abnett, Bowles, and Mohan, 'The role of charitable funding'. 15 The three founding acts were the National Health Service Act, 1946 (9 & 10 Geo. 6 C. 81); the National Health Service (Scotland) Act, 1947 (10 & 11 Geo. 6 C. 27); and the Health Services Act (Northern Ireland), 1948 (Acts of the Northern Ireland Parliament, 1948 C. 3). 16 NHS Reorganisation Act 1973, sects. 14-15, 23. 17  To understand the role of charity before the early 1970s, this paper begins by describing the distribution of hospital endowments before the NHS was created. It then examines the ways in which hospital endowments were treated in the three Health Service Acts and the impact of this legislation on the distribution of endowment income in England and Wales, Scotland, and Northern Ireland. Section III discusses the role played by endowments and other 'free moneys' in the financing of hospital services and section IV examines the ways in which these moneys were spent. Section V explores the implications of this discussion for our understanding of the history of health policy in each of the UK's territories and the role of charity today.

I VOLUNTARY HOSPITALS BEFORE 1948
Prior to 1948, the UK had a medley of different types of hospitals. The oldest institutions were the voluntary hospitals. The earliest had been founded in the twelfth century but the majority dated from the eighteenth and nineteenth centuries. Although they had been founded as charitable institutions, they derived an increasing proportion of their income from public authorities and investments and, from the 1860s, they also received funds from paying patients and hospital insurance funds. 22 During the 1930s and 1940s, these institutions accommodated almost onethird of all the UK's hospital beds (see hospital, including poor law hospitals, 'lunatic' asylums, maternity hospitals, and from the 1870s, municipally financed hospitals for patients with tuberculosis and other infectious diseases. The interwar years witnessed significant changes in the funding of voluntary hospitals. 23 Although charity remained an important part of hospital finance, 24 hospitals became less reliant on subscriptions and donations and more reliant on the income generated by hospital contributory schemes. However, many of these hospitals also derived considerable benefit from the income generated by their endowments. In 1938, investment income accounted for approximately 11 per cent of total voluntary hospital income but this money was not distributed evenly. The majority of hospitals derived no income at all from endowments and other investments whilst a minority derived substantial amounts. This was especially true of some of London's voluntary hospitals, including Guy's (26.5 per cent), St Thomas's (37 per cent), and St Bartholomew's (53.4 per cent). 25 There were also significant differences in the spread of investment income across the different parts of the UK (table 2). 26 More than 80 per cent of the voluntary hospitals in England and Wales, Scotland, and Northern Ireland reported annual incomes of less than £10 per bed from their endowments and investments in 1938. However, seven institutions received between £50 and £70 per bed and five institutions received more than £70 per bed. These institutions -St 23 Gorsky et al., 'The financial health of voluntary hospitals'. 24 Hayes and Doyle, 'Eggs, rags and whist drives', pp. 718-9. 25 Mohan and Gorsky, 'Voluntary hospitals database'. See also Eckstein, The English health service, p. 75. 26 See also Mohan, '"The caprice of charity"'.
Bartholomew's, St Thomas's, Guy's, the London Hospital, and the Great Ormond Street Hospital for Sick Children -were all London based.
These endowments played an important role in debates over the establishment of the NHS. 27 In 1941, when Ernest Brown outlined his initial plans for the creation of a National Hospital Service, he expected the voluntary hospitals to retain their independent status, and this position was reiterated in both the Brown Plan of 1943 and the 1944 Health Service White Paper. 28 However, the Labour Party wanted the State to take responsibility for the core funding of all hospital services and this raised fundamental questions about the position of voluntary hospitals and their endowments. 29 After accepting that the English and Welsh teaching hospitals (though not the Scottish teaching hospitals) should retain their endowments, the new government argued that the endowments of the remaining hospitals should be pooled in the interests of both equity and efficiency. 30 By contrast, the Conservatives complained that the 'confiscation' of endowments disrespected the wishes of previous donors, undermined the connections between hospitals and their localities, and discouraged future donations. 31 Despite these arguments, both the NHS Act and the NHS (Scotland) Act passed with large majorities. 32 The first act confirmed that the English and Welsh teaching hospitals would retain control of their existing endowments, whilst the endowments of the remaining hospitals would be pooled under a new HEF. 33 In Scotland, decisions on the distribution of endowment income were delegated to a Hospital Endowments Commission (HEC), which meant that no further decisions were taken until the mid-1950s. 34 The 1946 Act also stipulated that 'any moneys forming part of the HEF may be . . . paid over to the National Debt Commissioners and by them invested in any securities which are . . . authorised by Parliament as investments for savings bank funds '. 35 This was intended to ensure that the funds were invested securely, but it also meant that they secured relatively low rates of return. This helps to explain why the real value of the HEF declined over time, even though the value of the funds invested by teaching hospitals increased, and this led to the relaxation of investment restrictions under the Health Services and Public Health Act of 1968. 36 Although Bevan thought it was 'repugnant' for hospitals to have to rely on charity, hospitals retained the right to receive future gifts and donations. Section 7 (4) of the 1946 Act stated that endowments given between the passage of the Act and the 'appointed day' should remain with the Management Committee of the hospital to which the endowment was given, and section 7 27  (1) of the 1947 Act introduced a similar clause for Scotland. The acts also made further provision for donations received after they came into operation. Sections 59 and 60 of the 1946 Act allowed Regional Hospital Boards (RHBs) and the Boards of Governors (BGs) of Teaching Hospitals 'to accept, hold and administer property upon trust for purposes relating to hospital services or . . . research', and to continue to receive both capital and income from these trusts. Sections 58 and 59 of the 1947 Act conferred similar powers on RHBs and Boards of Management in Scotland. As a Ministry of Health memorandum explained, 'it is therefore open to members of the public, independent contributory schemes and other organisations to give regular or special sums for either general or special hospital purposes, and to testators similarly to bequeath money to Boards or Committees'. 37 In Northern Ireland, health policy was a devolved responsibility of the Northern Ireland Parliament. The Minister of Health, William Grant, wanted to allow Northern Ireland's voluntary hospitals to retain their endowments, but the Treasury argued that this would constitute a 'departure from parity'. 38 It was therefore agreed that control of the endowments would pass to the province's newly formed Hospital Management Committees (HMCs). The Health Services Act (Northern Ireland) established 29 such committees, of which 18 were responsible for more than one hospital. 39 However, HMCs were also required to ensure that endowments were only used for the benefit of the hospitals for which they were originally intended. 40 As the Tanner Committee explained, there was 'no provision in Northern Ireland for the pooling or redistribution even of general endowments among hospitals and control of the funds remaining after the discharge of . . . liabilities rests in many instances with individual hospitals, not their Management Committees'. 41

II THE DISTRIBUTION OF HOSPITAL ENDOWMENTS
As the previous section has shown, the 1946 Act established different arrangements for the treatment of endowments held by teaching and non-teaching hospitals. Any endowments held by a teaching hospital, or by a hospital which formed part of a teaching hospital group, were transferred to the hospital's Board of Governors, whereas endowments held by non-teaching hospitals were transferred to the HEF. Although the Act provided some scope for endowments to be shared within teaching hospital groups and between non-teaching hospitals, it did little to redistribute these resources between teaching hospital groups or between teaching and non-teaching hospitals. This meant that the fundamental distinction between teaching and non-teaching hospitals remained intact. Although the Government's appropriation of hospital endowments attracted considerable controversy, the exemption of the English and Welsh teaching hospitals provoked little debate. In April 1946, Bevan told the House of Commons that 'the teaching hospitals will be left with all their liquid endowments and more power . . . than in the past', and on 22 July he said that 'the endowments of teaching hospitals are distinguished, to a very large extent, from the endowments of 37 TNA MH99/37, 'Endowment and other "free" money' (HMC (48) 25; BG (48) 23)), para 4. 38 Gray, 'Government and the administration of hospital services', pp. 127-35. The politics associated with the process of health service reform in Northern Ireland have also been discussed by Privilege, 'The Northern Ireland Government and the welfare state'; and Privilege and Jones, 'Government, local government and health reform in Northern Ireland'. 39 Gray, 'Government and the administration of hospital services', pp. 527-33. 40 NIHA, Second Annual Report, p. 92. 41 Government of Northern Ireland, Report . . . on the Health Services of Northern Ireland, paras. 124-6. general hospitals because . . . [they] are earmarked for special purposes, such as cancer research '. 42 In 1969, a Treasury review attributed the separate treatment of teaching hospitals to '[their] exceptional standing . . . their eminent suitability as centres for research and innovation, and their need for special status and sufficient independence as institutions working in close association with the Universities'. 43 In 1948, the Government announced plans for the creation of 36 teaching hospital groups, including approximately 150 separate institutions and 27 000 hospital beds. 44 These institutions accounted for approximately 5 per cent of the total number of hospitals in England and Wales and 10 per cent of the total number of beds (see table 1), and their endowments had a combined value of approximately £20 million. 45 This was roughly equivalent to the net value of the assets transferred to the HEF. 46 The income from these assets was then shared between the non-teaching hospitals, including approximately 2800 individual hospitals and more than 200 000 hospital beds. 47 In contrast to the 1946 Act, the NHS (Scotland) Act included an explicit commitment to the transfer 'in appropriate circumstances' of endowments between both Boards of Management and RHBs, 48 and this was reflected in the HEC's recommendations. Although some argued that Scottish teaching hospitals should be treated on a similar basis to teaching hospitals in England and Wales, 49 the HEC concluded that the majority of the funds should be shared within (though not between) the country's five RHBs. 50 The Commission also recognized that, even though 'the bulk of research work has been carried out in teaching hospitals . . . many other hospitals have made and can make significant contributions', and recommended the establishment of a new body, the Scottish Hospital Endowments Research Trust (SHERT), to facilitate this. This work was to be funded by contributions from all the RHBs, with the exception of the Northern Board, whose endowment income was more limited. 51 Tables 3 and 4 illustrate the impact of these decisions on the distribution of endowment income both within and between Scotland's RHBs. Table 3 compares the average value of the income generated by hospital endowments in each of the five regions and table 4 presents how income was redistributed within the south-eastern region, which was also the wealthiest. This table presents how the gap between the poorest and wealthiest institutions was reduced and how the mechanism 42 Hansard (Commons), 5th series, vol. 422, col. 63 (30 April 1946);idem., vol. 425, cols. 1793idem., vol. 425, cols. -4 (22 July 1946 ensured that some funds were made available to all hospitals. However, it also highlights the extent to which funds continued to be concentrated in certain institutions, whilst others, including the region's psychiatric hospitals, remained neglected. We can also use these data to compare the value of the income generated by endowments in Scotland with the income generated in England and Wales. In England and Wales, the HEF sought to ensure that each non-teaching hospital would receive an annual income of 18 shillings (s) (£0.90) per bed in 1948/9. 52 This figure had increased to 30s (£1.50) per bed by 1955. 53 In Scotland, the average value of the payments generated by the redistribution of endowment incomes ensured that all of Scotland's hospitals received an income of at least £2.14 per bed, and the average value of the payments made to hospitals which had previously received no endowment income was just under 50s (£2.49). 54 During the 1960s, the formula used to allocate endowment income by both the HEF and the HEC was criticized on two counts. The original allocations were based on the number of beds in each hospital in the early years of the NHS and took no account of subsequent changes. 55 The formula also took no account of the needs of different types of patient. 56 This was particularly relevant to the provision of comforts and amenities for 'geriatric, chronic sick, mentally-ill and mentally-subnormal patients' requiring long-term care. 57 As a result, the Department of Health and Social Security (DHSS) and the Scottish Home and Health Department (SHHD) made two adjustments to the allocation formula at the end of the decade. It was agreed that future allocations should be based on the number of beds at the end of the preceding year and that long-stay beds should be 'double-weighted' for funding purposes. 58

III 'FREE MONEY'
The 1946 Act said that any endowments held by non-teaching hospitals before the Act was passed should be transferred to the HEF, whereas any endowments received after that date would remain with the hospitals that received them (see section I). We can identify the income generated for these hospitals by their pre-1946 endowments in the NHS accounts. It is not possible to isolate the income which the teaching hospitals and their groups obtained from pre-1946 endowments because these funds were retained by Boards of Governors and the summarized accounts do not distinguish the income obtained from 'old' endowments from that generated by new ones. The HEF generated approximately £700 000 for the benefit of RHBs and HMCS per year between 1950/1 and 1973/4 (table 5). However, the value of these payments was eroded by inflation and there was growing concern about the declining market value of the fund itself. The fund's managers were only permitted to invest in a limited range of stocks and this meant that its market value fell from just over £20 M in 1948/9 to £9.7 M 20 years later. 59 In 1968, the government relaxed the restrictions on investment policy and the market value increased to £12.7 M in 1971/2, before declining to £10.6 M in the following year. 60 Although hospitals were still able to benefit from charitable donations, the government was anxious to avoid any implication that the money provided by the Exchequer was insufficient for their 'normal needs'. 61 Consequently, although the Ministry continued to encourage fundraising by independent organizations, such as Hospital Leagues of Friends and the organizers of Hospital Sunday appeals, 62 it said that no fundraising activities should take place on hospital grounds and prohibited the display of collection boxes for named hospitals in railway stations and public houses. 63 It also insisted that hospital staff could only take part in fundraising activities when out of uniform and banned members and officers of hospital boards and committees from taking part altogether. 64 However, these restrictions were relaxed after the Conservatives returned to power. In 1952, it was agreed that the members of hospital authorities -but not their officers -could engage in fundraising activities in a private capacity, 65 and nurses were allowed to take part in independently organized fundraising activities whilst wearing their uniforms from 1953 59 TNA MH115/7, DHSS, 'HEF Investment Policy', September 1969; see also T227/4008, 'NHS reorganisation: the future of the HEF'; and HEF, Annual Accounts, 1948/9-73/4. 60 The rules governing investments were relaxed under section 7 (2) of the Health Services and Public Health Act, 1968 (1968 C. 46 onwards. 66 The Minister of Health, Iain MacLeod, announced that contributions to capital expenditure from non-Exchequer funds would no longer be offset against capital allocations to hospital boards in 1954, 67 and Ministry of Health officials endorsed the use of hospital grounds for fundraising purposes in 1959. 68 As we can see from figure 1, RHBs and HMCs continued to receive income from new gifts, legacies and donations throughout the period, but they also generated a separate income strand from subscriptions, grants, and donations from 1958. The combined value of the sums generated under these headings rose to more than 60 per cent of the total value of 'free' or non-Exchequer funds by the end of the period.
Although the post-war Labour government was anxious to distance hospital authorities from any direct involvement in fundraising activities, gifts, legacies and trusts were already an established part of the NHS before Labour left office in 1951, and income from subscriptions, grants, and donations increased in both absolute and real terms after the party regained power in 1964. 69 The potential value of this income was also acknowledged by officials and Ministers during Labour's period of office. In 1967, a Government official warned against proposals to abolish the HEF on the grounds that 'this might discourage present-day donors and . and Social Security, Richard Crossman, asked 'whether it would be desirable positively to encourage future donations and legacies to NHS authorities . . . and . . . whether some new and special tax concessions should be offered in respect of such donations and legacies '. 71 Although no new concessions were introduced, Crossman rejected plans to pool endowment funds to ensure that the flow of donations was maintained. 72 In 1970, the government said that 'area health authorities will be able to accept and seek fresh gifts in aid of any part of their work, as happens at present. It is hoped that the public of each locality will continue to give generous support to their local health services'. 73 The decision to allow teaching hospitals to retain their original endowments means it is not possible to distinguish the income generated from pre-1946 endowments from the income generated from subsequent endowments. However, if we compare the combined value of the income received by non-teaching hospitals from the HEF and their post-1946 endowments with the aggregate value of the income generated by teaching hospital endowments, there is little difference. 74 On the other hand, the market value of teaching hospital endowments does appear to have increased more rapidly. In 1969, a Treasury official estimated that the aggregate value of the endowments held by the HEF and individual RHBs and HMCs was between £27 M and £36 M, whereas the market value of the endowments held by Boards of Governors was approximately £43 M. 75 Figure 2 also enables us to compare other aspects of the income generated by the different types of hospitals from non-Exchequer sources. The teaching hospitals derived substantially more income from property and estates, but they generated much smaller sums from 'gifts, legacies, and trusts' and 'subscriptions, grants, and donations'. This may be because they were less likely to attract smaller gifts and donations, or because income from these sources was labelled differently.
Although the Comptroller and Auditor-General published annual data on the income generated from non-Exchequer sources for hospitals in England and Wales, there are no comparable Scottish data. However, annual accounts were published by the SHERT. The Trust achieved its goal of generating at least £100 000 from its investments in almost every year from 1957/8 to 1973/4, and this figure was supplemented by a small but increasing flow of donations, legacies, and covenants. However, there was also growing concern about the declining capital value of 71 TNA T227/4008, Widdop, 'Hospital service trust funds', 10/9/69. 72 TNA T227/4008, Maclean, 20/9/69. 73 DHSS, National Health Service, para. 80. The Green Paper was published, with a foreword by Crossman, before Labour left office. The SHHD Working Party on Hospital Endowments also recommended that 'financial support for the hospital service through donations and legacies . . . should be encouraged' (SHHD, Hospital endowments, para. 2). Although Mohan and Breeze (Logic of charity, p. 16) have argued that 'governments since at least the Thatcher administrations  have attempted to encourage an expansion of charitable giving to, and provision by, the charitable sector', the evidence presented in this paragraph shows that support for such initiatives can be traced back much further. 74 Over the period 1950/1-73/4, the aggregate value of the sums received by RHBs and HMCs from the HEF and other endowments was £32.4 M, and the aggregate value of the income generated by teaching hospital endowments was £32.3 M (see Summarised accounts of Regional Hospital Boards, Boards of Governors of Teaching Hospitals, Hospital Management Committees and Executive Councils, 1948Councils, /9-1973. 75 The author suggested that the value of the sums held by RHBs and HMCs was £15.7 M. If this were added to the current value of the HEF (£11.6 M), the combined value would be £27.3 M. However, they also suggested that the total value of hospital endowment funds (including the HEF) was 'of the order of £79 M, of which Boards of Governors enjoy about £43 M, or some 54.4 per cent', which suggests that the value of the funds held by other bodies was somewhat higher. See TNA T227/4008, 'Hospital Service Trust Funds', 22/7/69, paras. 10, 17. The Health Services Act (Northern Ireland) described the funds which a hospital had accumulated before 5 July 1948 as 'endowments' and gifts, donations, and bequests received after the appointed day as 'gifts', 79 and the NIHA showed the combined value of the income generated from 'investments' and gifts from 1951/6 onwards. Investment income rose from an annual average of just under £60 000 in the early-1950s to approximately £100 000 during the 1960s and more than £150 000 (at current prices) in the early 1970s (see figure 3). The annual value of the gifts received following the appointed day ranged from £45 000-80 000 during the 1950s and from £50 000 to more than £145 000 during the 1960s, before rising again during the early 1970s.
These figures do not provide a full account of the role played by endowments and other charitable gifts in the development of Northern Ireland's hospital system. The 1948 Act said that endowments should be transferred to HMCs, but those held by the Robinson Memorial Hospital in Ballymoney were only transferred to North Antrim HMC at the start of the 1960s. 80 The accounts also exclude the income derived from endowments held by the Mater Infirmorum. This 76

IV USES OF CHARITABLE FUNDING
Although NHS hospitals retained access to endowment income and the right to receive new gifts, the question of how these funds might be spent was largely ignored. In 1946, the Lord Chancellor suggested that hospitals might use their endowments and other 'free moneys' to pay for 'those little . . . trimmings which make so much difference to patients' comfort and happiness' but he was unable to explain what these might be, other than suggesting that they might include 'all those additional things which mean so much to the comfort of the patient and which will have to come from private funds'. 82 This problem was not resolved by the wording of the 1946 Act. As one of the Ministry's legal advisors observed, the act enabled hospital authorities to use the money they received either from the HEF or other endowments for 'purposes relating to hospital services' but 'the term "hospital services" is . . . nowhere defined' and might therefore 'extend to the application of income for any purpose which the Board or Committee in question bona fide considered to be likely to advance 81  the efficiency or beneficence of the services provided'. 83 A later review also concluded that 'the term "hospital services" is not defined in the Act but . . . clearly covers a wide range of purposes'. 84 The Government was particularly anxious to avoid any implication that public funds were inadequate. As the Ministry explained in December 1948, 'all ordinary expenditure is met from the Exchequer . . . and hospitals are therefore in no way dependent on voluntary financial help for their normal needs'. It therefore insisted that RHBs and HMCs should neither 'directly or indirectly invite contributions'. However, this did not preclude 'the acceptance of gifts made . . . by independent bodies such as the King Edward's Hospital Fund . . . individuals . . . or [Leagues of] Friends', providing that such bodies were 'wholly independent' of NHS structures. 85 Although this stipulation was designed primarily to protect the NHS against allegations of inadequacy, it also gave organizations such as Leagues of Friends a greater degree of autonomy. The National Association of Hospital Leagues of Friends claimed that they 'would have control over their own finances and would therefore be free to supplement in any way they wished the provisions of the NHS to the benefit of both the patients and staff'. 86 At the start of the NHS, officials argued that the primary function of the 'free moneys' held by RHBs and HMCs was to provide amenities for staff and patients. The Ministry claimed that, whilst the Exchequer was responsible for the provision of 'necessary' items, non-Exchequer funds should be used for 'luxuries'. However, as Prochaska has argued, 87 the distinctions between 'necessities' and 'luxuries', and between 'essentials' and 'amenities', were far from clear. 88 An early example of this ambiguity was provided by the question of 'comforts', such as sweets and tobacco. Before 1948, Poor Law hospitals had often provided 'sweets, tobacco, newspapers and periodicals, entertainments etc.' to their patients, but the Ministry argued that this practice should now cease, and that patients who had no means of their own should apply instead to the National Assistance Board for a 'comforts allowance'. 89 The application of this policy caused 'a great deal of disappointment and heartburning' and the Ministry conceded that such comforts should be provided. However, it continued to insist that this was not an appropriate use of Exchequer money and that the cost should therefore be borne by non-Exchequer funds. 90 The difficulty of distinguishing between luxuries and necessities was also highlighted in a discussion over library services. In 1950, the Order of St John and the British Red Cross announced that they would no longer be able to supply books to hospital libraries in England and Wales without charge, 91 and it was agreed that the cost should now be borne by 'free moneys'. However, as W.O. Chatterton pointed out, 'a library service . . . is definitely a part of therapy and . . . could not be classed as an amenity pure and simple'. A Treasury official retorted that this 'could be true 83  of anything on which endowment income could be spent' and doubted whether the matter was worth pursuing. 92 Nevertheless, in 1951 the Treasury did agree to the use of Exchequer funds for the purchase of newspapers and magazines in mental hospitals and mental deficiency institutions on the grounds that these 'have a definite therapeutic value '. 93 This debate also had wider implications for the relationship between the two sets of funds. As the Treasury's Edward Hale argued, 'if therapeutically-beneficial amenities must be provided out of taxation, we seem to reach a position in which there is no field of patients' amenities which is suitable for the expenditure of endowment income', and this raised the question of what this income should be used for. 94 Meanwhile, if there was no hard-and-fast line between items which could be funded out of free moneys and items which could be funded by the Exchequer, free money might also be used to provide services which the Exchequer itself would have funded under other circumstances. 95 As the Guillebaud Committee concluded, 'if a hospital authority wishes to improve the furnishings or the standard of building construction in a new wing or hospital department, which would cost more than the amount of Exchequer money available at the time, we think it entirely appropriate that the hospital authority should finance the "element of improvement" out of their non-Exchequer funds . . . if the terms of the Trusts permit'. 96 The use of free moneys to fund staff amenities also posed problems. The Ministry's legal advisor argued that free money could be used 'for any purpose which the Board or Committee . . . considered . . . likely to advance the efficiency or beneficence of the services provided'. This might include 'loans to members of staff in financial difficulty' or even 'the purchase of a house for an ex-employee' or 'loans to members of staff for the purposes of cars', although it excluded 'the provision of cocktail parties and tea parties for doctors, surgeons and others leaving to take up appointment elsewhere'. 97 The Treasury argued that free money could also be used to fund the provision of sports facilities but not for purposes of staff insurance, since this was provided separately. 98 Although many of these problems applied to all types of hospitals, the teaching hospitals posed additional issues. Bevan wanted teaching hospitals to retain their endowments because they engaged in research, and this was one of the central purposes stipulated in the act. 99 However, as Trevelyan explained, this decision also meant that a small number of institutions had access to resources which could be used for much larger initiatives, 'and there have been examples of expenditure being met from these funds to save administrative delay which would have resulted in securing approval to the expenditure being met from public funds'. 100 This issue was highlighted by the debates which accompanied the construction of Guy's Hospital Tower, which was described as the tallest hospital building in the world on its completion 92 TNA T227/888, Chatterton to Mitchell, 3/7/50. in 1974. 101 The hospital had prepared an initial building plan in 1947 and submitted a revised proposal to the Ministry of Health in 1961. It used its endowment fund to investigate hospital designs in Denmark, Germany, Italy, Switzerland, and the United States and, in 1965, it offered to provide 'substantial financial assistance' from the Fund to enable the project to be completed at an early date. It was therefore able to use its endowment money to expedite building progress andarguably -bounce the Ministry into giving approval. 102 Although the Ministry wanted to ensure that 'free money' was not spent inappropriately, it recognized that 'our regulation-making power . . . is limited to income derived from the central fund [i.e. the HEF]. We cannot control the use made by RHBs and HMCs of other free money and we have no control over Board[s] of Governors'. 103 This problem was compounded by the rather inconsistent ways in which expenditure was reported. In 1950/1, Mid-Glamorgan HMC spent £1973 on 'Hospital purposes and research', but this sum included £1897 for staff and patient amenities. 104 Other HMCs, such as Rhymney and Sirhowy Valleys, simply provided itemized lists of expenditure under such headings as Christmas extras, staff entertainments, sports equipment, cinematograph accessories and film hire, and 'other items'. 105 North Wales Mental Hospital HMC spent just over £1676 on medical equipment for research, the library, gramophone and records, furniture, bus hire, concerts, hire of films, sports equipment, grants to patients and staff, and 'miscellaneous' items. 106 The problems involved in accounting for the use of free money were also reflected in the Comptroller and Auditor-General's Annual Reports. Initially, the only categories were 'patient and staff amenities', 'hospital purposes or research', and 'other'. In 1954/5, the categories of 'hospital purposes' and 'research' were separated, and 'patient amenities' and 'staff amenities' were reported separately from 1957/8. In 1966/7, the category of 'hospital purposes' was abandoned altogether and a new category of 'contributions to hospital capital expenditure' was introduced.
Despite these limitations, the Comptroller's Reports highlight the main differences between teaching and non-teaching hospitals. As we can see from figure 4a,b, RHBs and HMCs spent approximately one-third of their free moneys on staff and patient amenities over the period as a whole, and approximately 23 per cent of their free money on contributions to capital expenditure from 1966/7 onwards. Boards of Governors spent a much smaller proportion of their money on staff and patient amenities (approximately 13 per cent over the period as a whole) and much larger proportions on either research (29 per cent between 1954 and 1974) or contributions to capital expenditure (30 per cent between 1966 and 1974). Figure 5a,b shows the same information after allowing for changes in NHS prices. The real value of the expenditure incurred by RHBs and HMCs increased by approximately 46 per cent between 1951/2 and 1973/4, whilst expenditure by Boards of Governors increased by 127 per cent over the same period. 107 101 The hospital derived much of its wealth from donations made by Thomas Guy and Henry Clayton in the eighteenth century. Both Guy and Clayton amassed substantial fortunes from their involvement in the slave trade [see Our history -Guy's & St Thomas' Foundation (gsttfoundation.org.uk)   The framework for the distribution of endowments and other 'free moneys' in Scotland was set by the HEC in 1955, and overall responsibility resided subsequently with the DHS and SHHD. As Stewart argued, successive governments were largely content to allow the Scottish NHS to develop independently. 108 However, both the DHS and the SHHD sought to coordinate policies with both the Ministry of Health and Treasury.
finalized. The comparison is based on an index of NHS prices derived from the Report of the Royal Commission on the NHS (table E8). Although the Scottish NHS was established under separate legislation, the basic principles governing the use of endowments and other free moneys were broadly similar. As Arthur Woodburn, the Secretary of State for Scotland, explained in June 1949, 'with the introduction of the NHS many of the purposes to which endowment funds had previously been devoted became the responsibility of the state. There had been placed on the Commission the onerous duty of the redistribution of the funds thus released to the best advantage of the community. . . . He himself would commend in particular . . . the supplementing of hospital outpatient department amenities and the furtherance of medical research'. 109 However, when the Commission produced its final report in 1955, it recognized that even though 'the erection of buildings for hospital purposes was essentially a function of the Secretary of State . . . we thought it right that Boards should not be precluded from applying endowments for building purposes '. 110 The DHS also recognized that the concept of 'amenities' was itself rather vague and that the boundaries between items which might be financed out of free money and from the Exchequer were also unclear. This issue was compounded by the possibility that the needs of patients in different types of institution might also vary. In 1951, the Department identified a number of items which should only be funded voluntarily. These included flowers, Christmas gifts for adults, library facilities and newspapers for patients, and newspapers and periodicals, wirelesses, Christmas functions, dances, and film shows and concerts for staff. However, other items could be financed out of public money if no other funds were available. These included concerts and film shows for patients in long-stay institutions, Christmas gifts for children, Christmas dinners, wirelesses, visitors' chairs, and 'reasonable recreational facilities' for patients, and 'reasonable sports facilities', nurses' prizes and medals, and transport to recreational venues for staff. 111 Although neither the DHS nor the SHHD published annual accounts, the SHHD Working Party on the Allocation of Hospital Endowments summarized the money expended from endowment accounts over the period 1964/5-1966/7 (table 6). In addition to demonstrating the disadvantaged position of hospitals for mental illness and mental deficiency, it also showed that Scottish Boards of Management spent approximately 15 per cent of their endowment income on staff and patient amenities and 4 per cent on research. This was in addition to the sums already provided through the SHERT. A total of 9.8 per cent of endowment income was spent on medical and surgical equipment and more than 23 per cent on hospital buildings.
As we have already seen, the Northern Ireland Government was especially anxious to preserve voluntary involvement in the health service and this was reflected in the NIHA reports. Both the second and third annual reports noted that 'hospitals continued . . . to receive gifts and in some cases these were substantial' 112  patients' canteen and Ulster HMC used its fund to support the cost of constructing two houses in conjunction with a new hospital in 1961. 114 Although the majority of the contributions made by these funds were relatively minor, the Authority placed very few restrictions on their use. Both the second and third reports highlighted the fact that 'gifts . . . are available for spending at the discretion of the appropriate committee' subject only to 'the wishes . . . of the donors and . . . the provisions of the Act'. 115 The Act also ensured that endowments would continue to be associated with the hospitals for which they were originally intended and this meant that a small number of institutions retained access to substantial amounts of money, and they appear to have had few qualms about using them to supplement statutory funds.
The NIHA detailed the contributions which 'free funds' had made to various hospital building projects from 1952-60 and 1966-72. Whilst some of these, such as wireless installations, the construction of a nurses' recreation hall and a relatives' rest room, are broadly consistent with the types of amenities outlined by the DHS in 1951, others are much more difficult to distinguish from 'core' medical and surgical services. For example, Belfast's Royal Victoria Hospital used its 'free funds' to support the construction of a neurosurgical operating theatre and ward unit in 1953, an angiocardiography department in 1954, a metabolic department and dermatology ward in 1957, a cardiac catheterization unit in 1958, improvements to an operating suite in 1960, and a new outpatient centre in 1969. The Royal Belfast Hospital for Sick Children used its 'free funds' to help pay for the construction of new operating theatres in 1971. 116 These payments also reflected the extent to which endowment and gift funds were concentrated in a small number of institutions. During the period 1950-64, the NIHA published details of the sums expended out of both general and free funds by each HMC. Although the data are incomplete, they suggest that 'free funds' were responsible for approximately 1.3 per cent of total HMC expenditure across the period. However, they accounted for more than 5 per cent of the sums expended by Belfast's HMC, which included the Royal Victoria Hospital, Royal Maternity Hospital, and Royal Belfast Hospital for Sick Children, and 4.91 per cent of the sums expended by Forster Green HMC. These hospitals accounted for approximately 70 per cent of 'free fund' expenditure overall. 117

V CONCLUSIONS
As Trevelyan argued, voluntary service continued to play an important role in the development of the health service, and this included the provision of financial support. 118 Much of this was related to the preservation of pre-war hospital endowments, but hospitals also attracted new gifts and donations and the value of these donations increased over time. Although the post-war Labour government had limited the involvement of hospital authorities and staff in fundraising activities, the Conservatives began to relax these restrictions in 1952 and officials endorsed the use of hospital grounds for fundraising in 1959. Both Conservative and Labour governments wanted to restore the financial health of the HEF, and Labour also wanted to do this in ways which did not damage future fundraising potential. Although policymakers were anxious to maintain the flow of charitable contributions, the income from these sources failed to keep pace with health service expenditure over the period as a whole. This is illustrated by table 7, which compares income from charitable sources and other forms of non-Exchequer income with the growth of health service expenditure in England and Wales between 1950/1 and 1973/4. However, contributions from charitable sources were not always 'peanuts'. 119 During the 1950s, income from subscriptions, grants, donations, and other charitable sources was equivalent to more than 3 per cent of the total expenditure of the 116 These details are taken from the Annual Reports of the NIHA for 1953NIHA for , 1954NIHA for , 1957NIHA for , 1958NIHA for , 1960NIHA for , and 1971 These calculations are based on data published in the Annual Reports of the NIHA for 1950/1-64. The following HMCs indicated that they had spent unspecified amounts of money from their 'free funds' in specific years: Banbridge and Dromore HMC: 1952HMC: , 1953Belfast HMC: 1951/2, 1953Coleraine and Portrush, 1953;Fermanagh: 1950/1;North Antrim HMC: 1950/1;North-West HMC: 1952, 1953Samaritan HMC: 1953;Ulster HMC: 1952, 1953. If the analysis is confined to the period 1954-64, 'free funds' accounted for 5.5% of total expenditure by Belfast HMC and 5.53% of total expenditure by Forster Green HMC; and these two HMCs were responsible for 69.91% of 'free fund' expenditure overall. 118 Trevelyan, Voluntary service and the state, passim.; see also Owen,English philanthropy, Cf. Prochaska, Philanthropy and the hospitals of London, pp. 226-7.

TA B L E 7 (Continued)
Non-Exchequer income (£000) Income from 'Subscriptions, grants, etc.' includes income from subscriptions, grants, and donations; gifts, interests, and legacies; and dividends and interest on endowments (including HEF income); 'Other income' includes income from property and estates, asset realization, and other income; 'Other NHS expenditure' includes all expenditure not accounted for by either RHBs, HMCs, or Boards of Governors, such as expenditure on local authority health and general practitioner services. Sources: For details of non-Exchequer income and expenditure by RHBs, HMCs, and Boards of Governors, see figure 1. Data on total NHS expenditure were derived from the Civil Appropriation Accounts, 1948/9-73/4. Anglo-Welsh teaching hospitals, and the value of these sums to individual hospitals was likely to have been much greater. When the NHS was established, Ministers argued that the state should take responsibility for the provision of 'core' services and that 'free moneys' should only be used for amenities and research. However, it was hard to draw a line between 'amenities' and other services, and many hospitals also used their endowments and gifts to pay for capital investment and construction projects. This was especially true in Northern Ireland, where a small number of especially well-endowed hospitals used their 'free funds' to pay for overtly medical and surgical initiatives.
Although the value of charitable donations has grown significantly in recent years, many of the problems and ambiguities which characterized the role of charity in the early years of the NHS have not been resolved. In 2021, following the death of Captain Tom Moore, the BBC reported that 'the focus of [NHS] Charities Together is the comfort and wellbeing of staff and patients -things that, in the words of one NHS worker, "make their working lives easier"'. 120 However, fundraisers have also argued that charitable income can be used to 'donat[e] state-of the-art technologies' 121 and purchase 'life-saving equipment'. 122 These somewhat contradictory statements highlight the extent to which arguments over the boundaries between the provision of 'core' and 'non-core' services, and between the responsibilities of civil society and the state, have not gone away.

A C K N O W L E D G E M E N T S
The authors would like to thank the Wellcome Trust for their generous support of the research on which this paper is based (award no. 219901/D/19/Z). The authors are also grateful to the journal's editors and referees, and to Martin Gorsky, John Mohan and Ellen Stewart, for helpful comments.

D ATA AVA I L A B I L I T Y S TAT E M E N T
The archival data that support the findings of this study are openly available in UK National Archives at https://www.nationalarchives.gov.uk/ and at the National Records of Scotland (https://www.nrscotland.gov.uk/).  Mohan, J. and Gorsky, M. (n.d.), Voluntary hospitals database. Available at http://www.hospitalsdatabase.lshtm.

I n t e r n e t s o u r c e s
ac.uk/.