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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,

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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

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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.

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