HC Deb 08 June 1999 vol 332 cc543-58

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pope.]

8.58 pm
Mr. Nigel Evans (Ribble Valley)

I am grateful for the opportunity to raise the issue of the dismissal of the three non-executive directors of the Guild Community Health Care NHS trust. I am also grateful for the opportunity to raise it at such an early hour. Last time I introduced an Adjournment debate, I did so after 6 am, so nowadays I think long and hard before applying for such debates.

This is a serious issue. Two of the three non-executive directors involved are constituents of mine, as are many of the trust's employees, and one of the directors is a constituent of my right hon. Friend the Member for Fylde (Mr. Jack), who is present. The three non-executive directors were sacked on 17 May for committing the crime of doing their jobs. They are well-respected citizens in the Preston area, and have served the public well with their actions during the case.

This bitter story is one of incompetence, mismanagement, intrigue, the publication of two independent reports, a murder, the suspension of a chief executive, the resignation of a chairman, the intervention of the hon. Member for Preston (Audrey Wise)—to whom I wrote telling her that I would mention her this evening—the dismissal of the three and, finally, the piéce de resistance: yesterday's sacking of the chief executive.

Some might think that the timing—only yesterday—of the sacking of Les Howell, the chief executive, was rather suspicious. The non-executives wanted the chief executive removed many months ago—but therein lies another strange tale.

The chief executive's suspension can be traced back to 8 March 1996, when one of the trust's patients, Daniel Holden, murdered a 42-year-old man named David Spencer. The East Lancashire health authority established an independent inquiry into Daniel Holden's care and treatment, which was chaired by William Greenwood, a solicitor, of Steele, Greenwood, Burnley. Also on the panel were a former consultant forensic psychiatrist, a former director of clinical services, and a former director of personnel of a national health service trust. They are all extremely well-respected figures in the medical profession, and it would behove anyone to take heed of their findings.

The inquiry's damning report was made available in October. It described Daniel Holden's treatment as far from ideal, and said that Daniel was not receiving the care to which he was obliged by statute to receive.

At the time of the murder, Daniel was on the supervision register of the Langdale unit, which is a medium secure unit at Whittingham, in my constituency. The inquiry described enormous deficiencies in Daniel's care and treatment, and said that he did not have a proper care plan, that his case notes were inadequate, and that procedure had been largely ignored. It also said that interdisciplinary and interpersonal workings within the trust were inadequate, and that communication between Daniel's family, his general practitioner and other groups was deficient.

Page 44 of the report states that the shortcomings and omissions in the supervision register included: a care plan that aimed to reduce risk and ensure that Daniel Holden's care needs were reviewed regularly, and that contact by a key worker was maintained; allowing for Daniel Holden's social worker, his GP, a relative or carer—or indeed even Daniel Holden himself—to participate in the initial discussion and decision; ensuring that the initial decision to put Daniel Holden on the Supervision Register was part of the care programme approach; discussion; the carrying out of a risk assessment; taking evidence from the criminal justice agencies when making the original judgments; informing Daniel Holden orally of his inclusion on the register". The report goes on to describe deficiencies in the care programme approach, including omission of written evidence of systematic assessment of health and social care needs; a care plan agreed between relevant professionals, Daniel Holden and his carers recorded in writing; close working between health and social services … a clear understanding of what to do if Daniel Holden failed to meet requirements or commitments. The report is damning.

On page 51, the report describes some of the problems with the chief executive. It states: However, it is consistent with our other findings about the managerial style of the trust, which was detached, uninvolved and autocratic. The chief executive insisted that Dr. Guly"—

who was the consultant forensic psychiatrist— carried an onerous work load of 24 beds plus a clinical directorship, and then put further pressure on her to assume responsibility for the high dependency unit. We find this attitude to have been oppressive. Whatever problems the trust may have had, it should not have acted in a manner that could have led to inadequate performance of her clinical duties and the clinical directorship. On page 57, the report recommends: We believe that chief executives should be highly visible individuals who draw together responsibility for the planning, implementation and the achievement of corporate objectives, to provide the best possible care to patients within existing resources. In our view, these responsibilities have not been adequately discharged—hence the plethora of critical reports about the unit".

The Guild Community Health Care NHS trust was itself at that time facing the threat of losing the contract for medium secure services. Therefore, the chairman, Patricia Diamond, and four non-executives met the chief executives of the four purchasing authorities. At that meeting, the chief executives of the purchasing authorities spoke of their concern about the trust's management style, and the consequent culture of blame and fear within the trust.

Attempts to change the culture by Dr. Kendle—a non-executive—with a statement of intent were reluctantly accepted by the chief executive. The chief executive had a very close working relationship with the chairman of the trust, Patricia Diamond. It was in no way surprising that the statement of intent was ignored, the culture of blame remained and senior staff continued to leave the Guild trust, demoralised.

When the Holden report was sent to the Guild trust, the chief executive responded to it with no reference to the board. The non-executives were informed of the report's findings only after the chief executive's response. That was the final straw for the three non-executives, who went to the regional headquarters with three executive directors to discuss their concerns and seek advice. Those at regional headquarters said that they shared the concerns of the board members and supported the course of action that the non-executives proposed—to vote on a motion of no confidence in the chief executive.

Before that action could be taken, the chairman of the board, Patricia Diamond, placed the chief executive on extended leave, which, after pressure from the board, was converted into suspension on full pay. That again demonstrates the close working relationship between the chief executive and the chairman.

The Guild trust then set up its own inquiry with the following terms of reference: To investigate the criticisms of the Chief Executive of the Trust made in the draft Report into the care and treatment of Daniel Holden dated July 1998. To investigate the conduct of the Chief Executive following the receipt of the draft Report. To investigate the Chief Executive's management style and conduct of relationships with Board members"— and various other individuals, and—

"to make such recommendations to the Trust Board as the Panel considers appropriate."

The panel consisted of Anne Galbraith, the former chairman of an NHS trust in Newcastle upon Tyne, and Neil Campbell, the chief executive of the Dumfries and Galloway health board. They are well respected in the health service and serious attention should be given to their findings. The panel spent five days in Preston taking evidence and was keen to preserve the anonymity of the witnesses. The report makes chilling reading and is more damning than the Holden report. It says that the chief executive's handling of the report was ill advised. Page 7 talks of the chief executive's autocratic and non-consultative approach. Page 8 states:

"the overwhelming number of respondents do not have confidence in the Chief Executive."

The report further states that those who had lost confidence in the chief executive, Mr. Howell, included virtually all the consultants in the trust, the major purchasers from the trust, the community health council, some representatives of the university, the trade union representatives and a sizeable number of trust board members, as well as a number of operational directors.

The report also says that, because of the close working relationship between the chief executive and the chairman, an avenue of checks and balances of corporate governance of the trust was lacking. Page 12 states that the panel was also greatly concerned by the weight of opinion among the consultant body showing a lack of confidence in Mr. Howell's management style.

The report's first recommendation said: In the light of Mr. Howell having lost the confidence of many of the key leaders in the trust, including the clinical community and significant external partners, to an extent that his position as chief executive has become untenable, the trust board are recommended to take immediate appropriate action. Significantly, the report does not ask for the resignation of the non-executives, who raised the issue and pushed it when that was difficult. After it was published, the chairman and another board member, David Nelson, met consultants, union representatives and community health council representatives without consulting other board members about what they were doing.

After this was raised with the regional office by the non-executive directors, Patricia Diamond, the chairman, visited the regional office and was asked to resign, which she did in January 1999. The regional office then recommended that a solicitor, Mr. Martin Edwards, be appointed to help handle the departure of the chief executive. Many options were investigated. But for the cost of litigation, there would have been immediate dismissal. However, the solicitor cautioned the board to be very careful about its decision and suggested that a compensation package for Mr. Howell's departure might be appropriate.

As discussions ensued, the hon. Member for Preston wrote a letter to the acting chief executive of the trust, challenging the Holden report and commenting on the Galbraith-Campbell report. In her letter of 17 January, the hon. Lady wrote: As I read the Report, I found myself repeatedly thinking, 'But this is childish". I looked for evidence of wrong-doing and all I saw was gossip and intrigue against the Chief Executive. I do not believe that the Chairman resigned willingly or that she accepts this Report. I do not accept this report. If I did I would have to conclude that the only sensible course for the Secretary of State to take would be to dissolve the whole Board and start again. No-one comes out of it with credit, and the Board members themselves appear from it to be totally ineffectual. As we saw at Question Time today, the hon. Lady has not changed her mind. She fully backs and endorses the chief executive, even though the Holden report and the Galbraith-Campbell report are damning and even though the chief executive was sacked yesterday by the new chairman of the trust, with the unanimous support of the board. I assume that that decision has been endorsed by the Secretary of State for Health and by the region.

The hon. Member for Preston says in her letter that all the board members were ineffectual, but that cannot have been true because at least three non-executive directors pushed the case to where it is today. The hon. Lady's letter is one of the oddest that I have read. It even states at the end that the chairman should be reinstated and the report rejected.

I also understand that the hon. Member for Preston spoke with the Secretary of State for Health, pressing her rather strange ideas on him. He may not have agreed with her every word, but he has agreed with her conclusions: to get rid of all the board members. It is a great shame that when I asked the Secretary of State for Health about the matter, he did not reply to my question himself even though he was the man responsible for the sacking. I wrote to him asking him to be here this evening, so that he could answer some of the points directly, but he is not here.

I should like to know whether the discussion between the hon. Member for Preston and the Secretary of State was minuted; if so, will he publish the minutes of that discussion? What discussions did the Secretary of State have with the region? The region fully backed the actions of the board, but in May it told members of the board that it had lost control four months earlier. To whom had it lost control? Did it lose control directly to the Secretary of State for Health? What has been his involvement in the affair?

On 19 May during an Opposition Day debate on the health service, the Secretary of State said:

Whistleblowers on the staff should have nothing to fear provided of course that they tell the truth. When my right hon. Friend the shadow Secretary of State for Health said, "So why sack them?" the Secretary of State replied: I cannot sack any NHS staff. That comment just displays the ignorance of Opposition Members."—[Official Report, 19 May 1999; Vol. 331, c. 1143.] If that is the case, it is interesting that in a press release issued on 17 May 1999, the NHS Executive stated: Mr. Dobson had concluded that relations between members of the Guild board had become irreconcilable and they have been asked to resign in the interests of the people the Trust serves. The Secretary of State has made it clear to the five non-executives that he will consider applications for NHS trust board membership from any who resign but, in the interests of the effective management of the Trust, if they refuse to resign, they will be dismissed. That is exactly what has happened.

What I find confusing is the disparity between the Secretary of State's statement during the debate, when he said that he did not have the power to sack NHS staff, and the press release, which states quite clearly that he did sack the non-executive directors.

Is the Secretary of State aware that it was the region's solicitor, Michael Edwards, who was urging caution? Is he aware that, on two separate occasions, board members wished to proceed with the removal of the chief executive? They were asked to halt discussions by the region because the matter was politically sensitive. Really? Politically sensitive to whom? When the board wished to use the sickness procedure—which would have brought the issue to a head—the dismissal letters for the non-executives arrived, and not the dismissal notice for the chief executive. He remained on suspension, but on full pay.

The subsequent sacking of the non-executives has enormous repercussions for other trust boards throughout the country. One board member contacted me, wishing to remain anonymous, and stated her fear that non-executives would have to toe the line or risk losing their positions. That simply cannot continue.

The three non-executives felt it wrong to resign because of the message that that would send to other non-executives. It might also be interpreted as a betrayal of those who had courageously given evidence to the Galbraith-Campbell inquiry. We must remember that Les Howell, the chief executive, was sacked only yesterday, so it is understandable that the non-executives wanted to see the matter through to the end. After all, they had instigated the report.

Both Mrs. Galbraith and Mr. Campbell have said that they are willing to speak to the Secretary of State, the hon. Member for Preston and others about their findings. Why has the Secretary of State still not spoken to the authors of the report? Will the Minister assure the House that he accepts the findings and recommendations of the report, the appointment and terms of reference of which were agreed by the Government's north-west regional office?

Will the Minister confirm the necessity in cases such as this for protecting the evidence of whistleblowers who, without such protection, may feel too fearful of the consequences of speaking out about any problem besetting their health authority or NHS health trust? Does the Minister understand that the report was a consequence, and not the cause, of the chief executive's suspension, which was justified by the existing evidence? Does the Minister understand that the report was commissioned to investigate whether there had been a loss of confidence in the chief executive? It was not a disciplinary investigation.

Why was the acting chairman, Dr. Kendle, instructed not to operate the trust's sickness procedure in respect of the suspended chief executive when he started to submit sick notes to the trust in early April? Why were the non-executives instructed in April to stop everything and to do nothing with regard to the suspended chief executive? Why did the regional office of the Department of Health inform the three non-executive directors in May 1999 that the regional office had lost control of the situation four months previously?

Did not the Minister take the easy way out by removing all the non-executive directors, rather than those responsible for dysfunctional activities in respect of the suspended chief executive? Does the Minister feel that the new board will be compromised in view of the fate of the three predecessors, who acted with conviction, in good faith and on the instructions and advice of the north-west regional office of the Department of Health?

I want the Secretary of State to initiate a full public inquiry into the goings-on at the Guild trust since the publication of the Holden report. The Government were elected on a manifesto which promised openness and transparency. If the Minister stands by that, a public inquiry must be the next step. I understand that the hon. Member for Preston has stated that if the chief executive were dismissed, she would demand that a public inquiry be set up by the Secretary of State. Does she stand by those words? If so, I will be delighted if she joins me in asking the Secretary of State for a public inquiry, and I look forward to her giving evidence to such an inquiry.

This morning, the three non-executive directors who had been sacked issued a statement. Referring to the sacking of the chief executive yesterday, they said: This decision by the new Trust Board totally justifies the stand we have taken. It completely exonerates our position because we are the very people who decided to dismiss the suspended chief executive officer because of the widespread loss of confidence in him and we three are the very people who were stopped from doing just that by political interference inside and outside the Trust. We acted throughout on the instructions of the Regional Office of the Department of Health and on the advice of the solicitor nominated by the North West Regional Office. Our negotiations to terminate the Chief Executive's employment were frustrated by political interference from Mrs. Audrey Wise M. P. and from the North West Regional Office who twice halted and delayed those negotiations, the reason given being "political sensitivity". The nature of that political sensitivity has never been explained and it is surely a dangerous precedent for the internal affairs of a Trust to be disrupted on the basis of undisclosed political sensitivity. It is most interesting that the announcement of the termination of the Chief Executive's employment should be made on the very morning of the day of the adjournment debate which has arisen as the result of our actions. No doubt people will draw their own conclusions from that. This is not a party political issue. The Guild Trust's affairs are not just the province of Mrs. Audrey Wise M.P. but also of Nigel Evans M.P. and Michael Jack M.P. who asked us what on earth was happening in the Trust. When we were invited to resign by the N.W. Regional office we were told that we had behaved impeccably, that we had not put a foot wrong and that they were most anxious to use our considerable expertise in the future in the service of the NHS. To have accepted that invitation would have compromised our integrity and made it impossible for us to speak out as we are doing now about the way that our role as non-executive directors has been disabled and undermined by political interference. The Secretary of State must prove that he has the interests of the patients and the people of Ribble Valley and Preston, as well as non-executives in the rest of the country, at the forefront of his mind. The setting up of a public inquiry will enable him to do that. I know that the Minister will mention the words "fresh start", as if that could make everything right. Does not he accept what the non-executives say: that Les Howell was sacked only yesterday and that, as they had initiated that course of action, they should have seen it through to the end? What about the message sent to all the other non-executive directors? The Minister cannot hide behind a simple fresh start.

I understand that there are currently two vacancies in neighbouring trusts in Lancashire that members of the trust could have been offered straight away but were not. There are too many unanswered questions. The accusations of political interference are extremely serious and must be answered. The only way in which they can be fairly answered, in an open and transparent way, is through a public inquiry. That would be right for the three non-executives and for their colleagues throughout the country.

I understand that there is a painting in the Tate gallery by a Mr. Frank Dobson, called "Truth". I suspect that it was not painted by the person of that name who is Secretary of State for Health—

The Minister of State, Department of Health (Mr. John Denham)

Pathetic.

Mr. Evans

What is pathetic is the way in which three non-executive directors who had done their job and blown the whistle on the chief executive who was mismanaging the trust were sacked by the Secretary of State, even though their view was endorsed by two reports.

I am asking the Minister to ensure that the truth comes out. The only way in which he can assure us of that is by immediately setting up a full independent inquiry to find out exactly what has gone on.

9.24 pm
Mr. Michael Jack (Fylde)

I congratulate my hon. Friend the Member for Ribble Valley (Mr. Evans) on the care and precision with which he ordered his account of what I believe is a scandalous situation in the Guild trust. He put on the record in fine detail a tale of growing difficulty that turned to concern, worry and despair for the non-executive directors as they went about their business. The people we are talking about are not party political appointees: they are citizens, chosen and approved by the Secretary of State as suitable people to be the representatives of the public in looking after the activities of the health trust.

I declare an interest in the sense that I am a non-executive director of a public limited company. Part of my role is to ensure that I represent the interests of the shareholders. If those who are in a paid managerial position on the board of the company do something that they should not, or go against the requirements of company law, I must be prepared to be a whistleblower and take a stand against anything that threatens the well-being of the company concerned. I am pleased to say that, so far, I have not seen any examples that would cause me to exercise that responsibility.

I talked to Mrs. Walton and Mrs. Jolly at length on the telephone when they first drew my attention to the concerns that had been well reported in our local newspapers, especially the Lancashire Evening Post. Like any Member of Parliament, I am used to talking to people, and I heard much concern from Mrs. Walton and Mrs. Jolly about the public interest. I heard that they had been given those public appointments, and then done what they thought was right and what they had been appointed for. They did not like the way in which the trust was being run, so they found ways, in the context of the report on the Holden case—as my hon. Friend the Member for Ribble Valley has mentioned—to investigate the criticisms that were made.

The two ladies went to the regional health authority and sought its advice on what they should do. The advice was clear: they were correct to ask for a further independent assessment. The two ladies did not rush into public print. When the Holden report was made available, they did not immediately table a motion of no confidence in the chief executive and others. Instead, they meticulously went about their business, as good directors should, and asked for an independent assessment of what had happened in the trust. They did not do that off their own bat, or try to find people who would write the report they wanted. Instead, they sought two people of knowledge and skill and found Galbraith and Campbell, both of whom had had considerable experience in the health service and who wrote the report.

I would have thought that the ladies were correct in the carrying out of their public duties. My hon. Friend the Member for Ribble Valley, in his closing remarks, touched on the central issue arising from the sacking of the three non-executive directors, and that is the question of what those people are supposed to do. What is their purpose? They are appointed to help to run and manage health trusts. However, the three in question were sacked for reasons as yet undisclosed.

We have read the reports in the newspapers, and my hon. Friend mentioned the claim that a fresh start was needed, and that there was disunity and disharmony on the board. All those reasons may be correct, and given the way in which the board was riven after the publication of the Galbraith and Campbell report, I am not surprised. However, sacking the non-executive directors was a funny way in which to treat honest people who were correctly executing their public duties. They were sacked unceremoniously, without any hearing. As my hon. Friend the Member for Ribble Valley said, Mrs. Jolly and Mrs. Walton would have spoken to anyone about what they had discovered.

When I heard about the matter, I tabled a series of what I considered to be sensible questions to the Secretary of State. I asked what discussions he had had with the North West regional health authority on the appointment of investigators to report on the administration of the Guild trust during 1998 and 1999. I was informed that the Secretary of State would let me have a reply "as soon as possible."

The Secretary of State's Department is on top of what is going on. It is clear that there was a high level of communication between the region and the centre, because the regional health authority suddenly found itself subcontracted as the Secretary of State's agent in the process of dismissal.

The assiduous Caroline Hastie, the health correspondent on the Lancashire Evening Post, wrote an article headlined, "Health Chiefs Ordered to Resign". In a sentence above the headline, the article stated that the Secretary of State had told bosses to quit by end of day". Caroline Hastie is a good reporter, not prone to exaggeration. She checks her facts and does the job properly; she saw the hand of the Secretary of State in the matter. However, when we checked behind the scenes, the Secretary of State had shuffled off the stage and the regional health authority was left holding the baby.

My hon. Friend the Member for Ribble Valley mentioned the authority's remarks about the matter being out of control. They show the state of desperation that the Secretary of State had reached. Like Pontius Pilate, he wanted to wash his hands of the affair and let the crowd decide the outcome. I do not know which part of the crowd decided the fate of the three non-executives, but that is the first smell that rises from this affair.

In the second of my questions, I asked the Secretary of State in what ways he had involved the chairman of the North West regional health authority in seeking the resignations of the non-executive directors. The next part of this sorry tale is really nasty. The Secretary of State did not have the openness to write letters to the non-executive directors, whom he must have trusted because he appointed them. By telephone, they told me that they received call after call, with mounting frequency, from the regional health authority, trying to persuade them to tender their resignations.

That is a nasty way to go about it. If those people had done something wrong, was there not a more open and straightforward way to tell them what the problem was? Apparently there was not, but I do not think that Mrs. Jolly and Mrs. Walton have made up the story for effect. I spoke to them, independently and without forewarning, on the same day. They could not have colluded, as there was no time between calls for them to decide to tell me the same story, but they both told me the same facts about the series of telephone calls.

In preparation for this debate, the Minister will have been briefed with a lot of background material. His civil servants will have gathered—from the regional health authority, the Guild trust, and elsewhere—a lot of material from which to synthesise the 15-minute reply that we shall enjoy at the end of the debate. The advice will have been given that some things should be said, and some other things should be left unsaid. That is why my hon. Friend the Member for Ribble Valley has called for a public inquiry, as I suspect that we shall not get to the bottom of the matter.

Mr. Denham

indicated dissent.

Mr. Jack

The Minister displays a little tetchiness. He wants his chance, but I am sorry to have to tell him that those non-executive directors have looked to my hon. Friend the Member for Ribble Valley and me to place on the record matters about which the Minister may feel deeply uncomfortable, so I have no hesitation in pressing on with my analysis.

The telling question that the Secretary of State failed to answer was simple: would he list the grounds on which he dismissed the board of the Guild trust, Preston? I still do not know why he did that, and he should tell us, in public. I asked whether he would list occasions on which the non-executive directors of the trust sought advice from the North West regional health authority on the way in which the trust was being run, and what advice was given. We should be entitled to know, but all I received on both questions was a holding answer.

I asked whether the Secretary of State would publish correspondence between his Department, the health authority and the chief executive of the trust, during 1998 and 1999, on the chief executive's administration of the trust during that period. I believed that there must have been some comment from the centre on all that was going on. However, I received only a holding answer to that question. I asked questions about meetings and communications involving the Department and the chief executive. I received another holding answer. Finally, when I asked what reports the Department had received on the administration of the trust during the past two years and what conclusions had been drawn, I received another holding answer.

In this age of open government, Members of Parliament should be able to expect answers to sensible, searching questions. The holding answer came on 25 May. By now, I surely should have had a further response. If the Secretary of State can sack the chief executive during the time it has taken me to table questions, I am distressed by the lack of an answer to them. I have received an answer to a couple of other questions, which told me to look in the Library. There we have it.

My hon. Friend the Member for Ribble Valley was right to read the statement published today by those who have been affected by this matter. I shall not detain the House by re-reading the statement, but it was clearly a plea from the heart from good people who feel deeply let down by what has happened. I am not surprised by that. My hon. Friend quoted extensively from the Galbraith-Campbell report, and I shall put on record exactly who the authors are. Mrs. Ann Campbell was formerly the chairman of the Royal Victoria Infirmary and Associated Hospitals NHS trust, Newcastle upon Tyne, a trust often cited and lauded by Ministers. Mr. Neil Campbell was chief executive of Dumfries and Galloway health board. Both know what they are doing when it comes to the health service.

My hon. Friend did not quote page 13 of the report. I do not criticise him for that; many parts of the report deserve detailed comments from the Minister. Page 13 notes: A major concern of the panel was the allegation of poor external relations with purchasers, the Region, the University, the Unions, the CHC. It goes on:

Purchasers indicated that they are concerned about an atmosphere of secrecy, lack of openness and an unwillingness to accept the role of the Health Authorities in developing and planning". The university representatives said that they had a lack of a feeling of partnership with the Trust, which appeared to regard the University resource as a free good to be milked and used. The union representatives voiced lack of confidence in Mr Howell, evidenced by their wish some time ago to push forward a vote of no confidence in him." The report goes on: The panel is aware of steps which Mr Howell took in relation to North West Lancs Health Authority, where a high level of personal animosity had developed between Mr Howell and Mr Edmundson"— the authority's chief executive.

I could go on quoting the report, independent evidence that surely emphasises why the three non-executives took it upon themselves to investigate the sordid dealings in the trust. Their reward for being public minded, for doing their job, for blowing the whistle and for taking the lid off a miserable can of worms has been summary dismissal by, we think, the Secretary of State or one of his agents, without explanation, without any letter and without any kind of alternative employment in the health service.

What an advertisement for public service. The whole matter stinks. The only way in which we will get to the bottom of the matter is if the Minister will tonight endorse and agree to the suggestion by my hon. Friend the Member for Ribble Valley that there should be a public inquiry.

9.40 pm
The Minister of State, Department of Health (Mr. John Denham)

I congratulate the hon. Member for Ribble Valley (Mr. Evans) on obtaining this debate. Indeed, I am grateful to him for raising the issue of the Guild Community Health Care NHS trust and to the right hon. Member for Fylde (Mr. Jack) for participating in the debate. I am also grateful to them for mentioning the actions that my right hon. Friend the Secretary of State felt it necessary to take on the membership of the trust board. I am grateful because these are important events and it is important to put on record the role of Ministers and officials in this sequence of events. I do not believe that those events fit the construction put on them in the debate.

I apologise to the House as I will, perhaps inevitably, cover some of the same ground as the right hon. Member for Fylde and the hon. Member for Ribble Valley, but it is important to put these matters on the record. First, I confirm that the new chairman of the Guild trust has now written to Mr. Howell, the suspended chief executive, to inform him that his employment will be terminated as from next Friday, 11 June. That decision was taken unanimously by the chairman and her new non-executive team, which concluded that it was in the best interest of the trust.

Our first priority, and that of my right hon. Friend the Secretary of State, throughout this unhappy episode has been to ensure that the best interests of patients are served. Given the events at the trust in recent months, we needed to be confident that the Guild trust was being properly managed and that there was mutual trust between all the board members. That was most definitely not the case. Indeed, the non-executive team had become dysfunctional. There were two camps within the trust board and while that continued it was going to be impossible for people to exercise their corporate role effectively. That is why it was felt necessary to make an entirely fresh start with a new board.

Although, my right hon. Friend valued the contribution that all the non-executive directors had made to the running of the trust, he was determined not to apportion individual blame for their failure to achieve a unified board. He sought their resignations so that they could all serve the NHS in the future.

It would be helpful if I set out the events that have occurred at the Guild trust, which have led us to the position that we are in today. The hon. Gentleman rightly pointed to the independent inquiry into the care of Daniel Holden as being the starting point for the scrutiny of management practice at the Guild trust. East Lancashire health authority commissioned that inquiry following the murder by Mr. Holden of a neighbour in Darwen, Lancashire, in March 1996. At the time of the offence, Mr. Holden was a patient of the Guild trust and was living in the community.

In assessing the role of the trust in caring for Daniel Holden, the inquiry report was highly critical of the management style adopted by the chief executive, Mr. Les Howell. It described him—I may be quoting the same passage of the report that was quoted earlier—as being "detached, uninvolved and autocratic", and asserted that his responsibilities had not been adequately discharged". The report recommended that the trust board should consider how to bring about the changes in management style that were necessary to enable the trust to make a fresh start.

A first draft of the Holden report was made available to trust board members in September last year. Having considered the report's findings, it was at this point that three executive and three non-executive directors decided to make known to the NHS Executive regional office their concerns about the way in which the trust was being managed. They met the north-west regional chairman, Professor Alasdair Breckenridge, and the regional director, Mr. Robert Tinston, on 1 October. They said at that meeting that their concerns pre-dated the inquiry report into Daniel Holden and that they had no confidence that their chairman would ensure that the report's criticisms were properly addressed.

A further meeting was held on 6 October between the trust chair, Mrs. Patricia Diamond, the regional chairman and the regional director, about the position of the trust chief executive. After that meeting and following consultation by the regional office with the then Under-Secretary of State for Health, Mrs. Diamond announced on 8 October that Mr. Howell had been suspended on full pay and without prejudice.

There followed an extraordinary meeting of the trust board on 13 October at which it was unanimously agreed to confirm the suspension of Mr. Howell. At the same meeting, the board unanimously agreed to commission an independent inquiry. Mrs. Ann Galbraith, former chairman of the Royal Victoria Infirmary and Associated Hospitals NHS trust in Newcastle, was chosen to chair it. She was assisted by Mr. Neil Campbell, chief executive of the Dumfries and Galloway health board.

Mr. Jack

In his opening comments, the Minister said that there were two camps, or divisiveness, on the board. Did not his last two statements about the board's unanimous decisions on key elements of the investigation of Mr. Howell's performance show that there was unanimity of purpose and action on those two vital points?

Mr. Denham

There was unanimity on that issue but there clearly was not on other issues. I shall explain in a moment why that judgment was reached.

The inquiry's terms of reference were drawn up by the trust board in consultation with the regional office and focused on the criticisms of Mr. Howell that had appeared in the draft report into the care and treatment of Daniel Holden; Mr. Howell's reaction to that report; his management style; and the conduct of working relationships. Throughout all those events, Ministers' offices were kept informed of developments at the Guild trust and the course of action adopted by the trust board.

Mrs. Galbraith's report was submitted to the trust board last December. It was a confidential document and not formally in the public domain, although its contents have been widely reported. Passages have been quoted this evening. Essentially, it confirmed many of the Holden report's criticisms of Mr. Howell. However, it acknowledged that its terms of reference meant that it did not contain details of successful initiatives of the trust under Mr. Howell's leadership. In addition to the criticisms of Mr. Howell, the Galbraith report also criticised the chairman's excessively close working relationship with the chief executive, which it argued had interfered with effective balance and control in the trust.

The trust chair and non-executives met on 29 December and again on 5 January to consider the report's findings and its five recommendations. They agreed that the chief executive's position had become untenable and that there could be no possibility of his reinstatement. However, they were unable to progress the report's other recommendations and it was becoming increasingly obvious that there were deep divisions between three non-executives on the one hand and the chairman and the other two non-executives on the other about the trust's future management.

It emerged that a vote of no confidence in the chairman was likely to be tabled at the board meeting on 19 January by the three non-executives who had originally approached the regional office with their concerns. Given that likelihood, the trust chairman approached the regional chairman for advice and, with reluctance, tendered her resignation on 11 January. That left five non-executives to conduct the trust's business, including the implementation of all aspects of the Galbraith report. Dr. Roger Kendle, a non-executive at the trust, was elected acting chairman after Mrs. Diamond's resignation. However, it became clear that despite the continued suspension of Mr. Howell and the resignation of Mrs. Diamond, the non-executives remained divided over matters relating to the chief executive's position and did not give appropriate attention to other aspects of the Galbraith recommendations.

Significantly, one of the report's five recommendations was to take firm and immediate action to restore confidence in the board's leadership. Sadly, even with a new acting chairman, the board failed fully to consider and address that issue and there continued to be two camps at board level. The three NEDs who broadly accepted all the recommendations of the Galbraith report were advised by Mrs. Galbraith that the trust was no further forward on 19 February, when she met them, than it had been in October.

Ministers received regular reports about those events from the north-west regional office. The Secretary of State visited the NHS Direct site in Chorley on 13 March and took the opportunity to discuss the case with the regional chairman and regional director, who expressed the view that relations on the board had broken down and that a fresh start was required.

In April, the regional chairman recommended to the Secretary of State that he should appoint Mrs. Christine Kirk to chair the trust on a short-term basis until a full-time appointment could be made.

Mr. Evans

I have listened carefully to the Minister's comments. Why were the three non-executive directors told by regional personnel—who were backing them in their action—that the region had lost control four months ago? Will the Minister tell us why he believes that the region had lost control and to whom?

Mr. Denham

On the information available to me, I cannot substantiate the claim made by the hon. Gentleman that the regional office had lost control. I understand that the matter was discussed on 13 March by the regional director, the regional chairman and my right hon. Friend. In that meeting, the view was expressed that relations on the board had broken down and that a fresh start was required. The regional chairman recommended the appointment of Mrs. Christine Kirk to chair the trust. She was chair of the nearby Calderstones NHS trust, having been appointed—as it happens—by the previous Conservative Administration, and was seen as having the necessary skills and experience to guide the Guild trust through a difficult period.

My right hon. Friend the Secretary of State met Mrs. Kirk on 19 April and concluded that she was the right person to undertake the job. She agreed to take up the post temporarily for a six-month period, before returning to the Calderstones trust. Her appointment was formally confirmed on 17 May. Before her formal appointment took effect, my right hon. Friend discussed the future working of the board with Mrs. Kirk. He had formed the view that the trust needed a fresh start with a completely new set of non-executive board members in place. Mrs. Kirk had also reviewed the minutes of previous board discussions and had concluded that the five existing non-executive directors could not work as a team and that to remove either grouping would be to apportion blame. She therefore agreed with my right hon. Friend that a fresh start would be in the best interests of the trust.

My right hon. Friend, however, did not wish to deprive the five non-executives of the opportunity to serve the NHS again. That is why at the end of April, they were informally invited by the regional chairman to submit their resignations from the trust board. My right hon. Friend did not want to terminate their appointments, as that would debar them from holding office again.

Two of the non-executives, Mr. Mallidi and Mr. Nelson, indicated their willingness to resign. However, the other three non-executives—Dr. Kendle, Mrs. Jolly and Mrs. Walton—advised the regional chairman that they wanted time to consider their position. They wrote to my right hon. Friend on 10 May setting out the reasons why they felt that they should not resign.

My right hon. Friend replied on 12 May, explaining in detail why he felt that a change was necessary. He again emphasised that his first priority was to ensure that the trust was being properly run and was functioning effectively for the benefit of the patients. He made clear his view that, to ensure the successful operation of the Guild trust, there needed to be mutual trust between members of the non-executive team across the complete range of activities.

While stressing that he did not apportion any individual blame, my right hon. Friend said he had formed the view that it would not be in the best interests of the trust, its employees and, most important, those who depended on its services for the non-executive team to stay in post. He believed that a completely fresh start was needed to overcome the complex problems that had beset the Guild trust for far too long. In his letter, my right hon. Friend made it clear that, were he obliged to terminate their period of office, that would debar them from holding office again. Resignation, on the other hand, would allow them to serve the NHS again. Two of the non-executive directors acknowledged that and duly tendered their resignations.

Regrettably, the other three non-executives remained unwilling to resign. In the circumstances, my right hon. Friend felt it necessary to terminate their terms of appointment. That took effect on 18 May. On the same date, a new complement of non-executive directors was appointed to serve on the board. They had been selected by a process that was entirely in accordance with the normal procedures and criteria for NHS appointments, and in line with the guidance issued by the Commissioner for Public Appointments, and the commissioner was briefed personally about the appointments on 19 May.

I am confident that, under new leadership, the Guild trust will be able to put behind it the managerial problems that have occurred. However, recent events should not be allowed to detract from the contribution the previous non-executives made, for which we are grateful. There is no question of people being penalised as a result of passing on their concerns. Let me make it clear: the three non-executives were right to approach the regional office with their concerns about the management of the trust. Where we disagree with them is on whether the trust could continue to operate under a new chairman, but with the same non-executives. We did not believe that this was either realistic or in the best interests of the trust and, given the reluctance of three of the non-executives to resign, my right hon. Friend terminated their appointments.

This has been an extremely unhappy episode and one which, thankfully, is a rare if not unique occurrence.

Mr. Jack

Does the Minister not understand from the exchanges that he has detailed that the non-executive directors who chose not to resign did so on points of principle and honour? They believed that they were right in the stand that they had taken and that, if they resigned, the action would be misconstrued as implying that they had made a wrong judgment.

Mr. Denham

I hope that that is not the case. By placing on the record my view and that of my right hon. Friend the Secretary of State that the non-executive directors were right to approach the regional office in the way that they did, I hope to have ensured that there can be no criticism or question marks in respect of their activities on that occasion. However, given the history of the trust, the decision had to be made as to the right basis for effective leadership on the board which would enable the problems of the past to be put behind the Guild trust and ensure that patients were served well in future. That is the only basis on which my right hon. Friend exercised his judgment in the way I have described.

As I said, these events are rare, if not unique. Not only were there problems of management and leadership at the Guild trust, but they were accompanied by a lack of common purpose and corporate identity among the non-executive board members. It is inevitable that, from time to time, such problems will happen among any group of people who work together, however deep their personal commitment to the NHS. Unfortunately, in the case of the Guild trust, those difficulties coincided with other managerial problems at the trust and we could not allow the situation to continue.

Mr. Evans

Does the Minister not accept that too many unanswered questions still hang over the whole affair? Christine Kirk will be a superb chairman of the trust and I wish her and the new board well in getting on with providing the service that is needed in the area. However, the three non-executives did nothing wrong: they were doing their job when they blew the whistle on the chief executive who was mismanaging the trust, yet their reward has been dismissal. That cannot be right. The only way to answer the questions that remain is to hold a full independent inquiry. Will the Minister give those non-executive directors that inquiry?

Mr. Denham

I have listened to the hon. Gentleman's suggestions and I have set out as clearly as I can the sequence of events, the actions taken by my right hon. Friend the Secretary of State and officials and the basis on which decisions were made. I cannot see how a further inquiry into events at the Guild trust would play any constructive role in enabling the new board and those who work for the trust to meet the needs of patients and develop services in the area. I hope that, when the hon. Gentleman has had a chance to consider my remarks, he will see that there has been a clear basis for the decisions that have been taken, and that those decisions were taken in the best interests of the NHS and the Guild trust, and of the patients and communities they serve.

Question put and agreed to.

Adjourned accordingly at one minute to Ten o'clock.