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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

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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

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.

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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

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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?

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