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Blackpool Teaching Hospitals NHS Foundation Trust: Governance

Volume 643: debated on Wednesday 27 June 2018

Motion made, and Question proposed, That this House do now adjourn.—(Kelly Tolhurst.)

At the beginning of this year, it was announced that the chair of the Blackpool Teaching Hospitals NHS Foundation Trust, Ian Johnson, would be stepping down at Easter. I had always found him approachable and helpful in my regular meetings with him to discuss the trust’s work. For the avoidance of doubt, I should say that although the trust is in the constituency of the hon. Member for Blackpool North and Cleveleys (Paul Maynard), who is sitting on the Government Front Bench, it covers not just my constituency and his, but those of the hon. Member for Fylde (Mark Menzies), the right hon. Member for Wyre and Preston North (Mr Wallace) and my hon. Friend the Member for Lancaster and Fleetwood (Cat Smith).

When it was subsequently announced that Mr Johnson had applied to become chair of the University Hospitals of Morecambe Bay Foundation Trust, I was mildly surprised, but thought nothing more of it. I was then interested, as I am sure others were—this was sent to myself and neighbouring MPs—to receive an email from the secretary of the trust encouraging us to go forward and talk about the process for Mr Johnson’s successor. I had no inkling then of the sequence of events that would lead me to seek this Adjournment debate.

What started to concern me about the circulation of this information was the extraordinarily short period of time that we were given. I did write to the secretary of the trust to ask why we had not been given earlier notice of the facts. When I found out that the advertisement had been placed in The Times, the date for the application was 16 April, which was within a very short period of time. I said that I would like more details on the shortlisting, the interviews and the interviewing panel. I said that I was sure that the trust would understand how important it was that there should be a strong transparency in the trust at such a critical point at this time. I got a slightly thin but soothing note from Michael Hearty, a governor of the trust, who announced himself as the chair of the nominations committee. He said:

“Let me first of all reassure you about the openness and transparency of the current Chair recruitment process.”

He took me through the process, and he did indeed confirm that it would be very speedy. He said that a long list of candidates had been presented to the nominations committee, but the list was not actually very long. It was a list of only eight, which makes me wonder why all the candidates were not interviewed.

There was then a very short process of presentations to stakeholders and final interviews. I wrote back to the governor and said that I thought there were still “serious questions” to be answered, particularly about the fact that there was no information about the closing date for applications. I asked him whether he would list the members of the nominations committee, and said that I was concerned that it had taken a week to provide me with merely a basic timeline regarding some of the questions that I had asked.

The second letter that I received from the governor was written in a rather smooth but slightly condescending fashion. He said:

“I am disappointed that my original response did not provide you with all the assurances that you were seeking and, as a consequence, you have found the need to ask further questions.”

As for the advertising of the process, he said that it was the first time that the trust had taken such a step, and that, in view of the progression, it thought that it would be open and transparent to let people know about it. He said:

“I am sure you will recognise its circulation as a well-intentioned act”,

although the closing date was an obvious piece of detail that could have been included in the original email.

At this point, I began to think of the old proverb that says:

“The louder he talked of his honour, the faster we counted our spoons.”

I said to the governor in response that I did not think that this was very transparent. I asked him who had appointed the nominations committee, and he told me that it was appointed by the governors. I am still at a loss to understand why the shortlisting involved such a hurry.

The other thing that bothered me was the inclusion of the chief executive of the trust, Wendy Swift, on the nominations committee. I laid out my concerns in an email to fellow MPs that I sent to them on 16 May, in which I said:

“the inclusion of the Chief Executive on that Committee, which effectively has overseen all aspects of this process, has prepared the short list of candidates and will presumably make a recommendation to Governors this Friday. I believe that to give any Chief Executive so prominent a role overseeing that process, as opposed to that person perfectly reasonably but separately giving thoughts and feedback to it, could be seen as anomalous in the context of the necessary future relationship of the new Chair to the Chief Exec.

I said that I had

“taken these steps to question what has gone on (with some reluctance and I think for the first time in my 20-years relationship with the Trust)”

because of my real concerns for the procedure, not for the individuals, because at that stage neither I nor anybody else knew who had applied or been shortlisted.

I then looked at the constitution of the trust and the manual of the council of governors. That manual made it very clear that the chief executive was not automatically one of the members of the committee. The role of the council of governors is, of course, to hold the executive to account, so the chief executive could have acted in an advisory capacity, but not as a member. The trust’s constitution said that she should be a member, so both of them could not be correct.

I wrote again to Mr Hearty on 17 May and said that the council of governors is

“responsible for establishing the Nominations Committee”.

I said that it is very clear that the chair’s appointment is its responsibility and that

“the only reference to the Chief Executive occurs in the section on Attendance at the Nominations Committee…It does not give any licence to the Chief Executive to sit as a fully-fledged member…determining all the processes, shortlisting candidates”

and so on. I asked him therefore to think very carefully as to whether this process should be “paused and recalibrated” because I believed that there was a significant danger that the clear protocols in the governors’ manual had been breached.

Well, he did not do that. In fact, an email was then sent by Sue Crouch, the lead governor, saying that although the constitution clearly indicated that the chief executive should be a member of the nominations committee, given the feedback from governors, Wendy had graciously offered to withdraw in the best interest of the process. But, of course, by that time she had taken part in three quarters of the process, and whether it was a gracious withdrawal or otherwise, I have no knowledge. That was not a very good situation.

I had become concerned about the situation with the trust and had therefore written to NHS Improvement to ask the same sorts of questions on what its role should be. I initially got back a letter from the director for the north region, Lyn Simpson, who said that NHS Improvement is not involved in the recruitment of chairs of foundation trusts, which, of course, was not what I had asked her. She said that the trust had given its assurances that this recruitment process was in line with the constitution, as well as open, transparent and governor-led, but she did not give any grounds for that advice.

I went back to Lyn Simpson, reminding her that I had had guidance from the House of Commons Library that foundation trusts are accountable to Monitor, which is now part of NHS Improvement. I had looked at the code of governance published by Monitor, which specifically referred to the appointment of chair, so I asked her to respond more fully. She did respond again, but said that there was no legal basis on which NHS Improvement could intervene in the appointment of a foundation trust chair. I did not find that very acceptable, but I did note that she said that Dr Kirkup’s recent governance report, published in February 2018, had highlighted the role that NHS Improvement plays in board appointments as “not sufficiently clear.”

Quite clearly, if procedure has not been followed, as the hon. Gentleman has outlined, surely at some stage he has to refer this case to the Local Government and Social Care Ombudsman. That must be a way of getting action given that this procedure has not been followed.

It might be, but I am hoping that the Minister might be able to make some comments on these issues today, because NHS Improvement has to fulfil its duties under legislation, and I do not believe that it has done that very well.

I received another letter expressing pleasure that the trust had responded positively with the concerns on the point that I had raised, but that was really a question of shutting the door after the horse had bolted, for the reasons that I have explained. I then wrote again, asking for a response from Mr Hearty. I did not get that, but I did get a reply from Sue Crouch, who told me about the meeting to confirm the candidate who was going to be presented. That candidate turned out to be Mr Pearse Butler, who coincidentally had just stepped down as chair of the Morecambe Bay NHS Foundation Trust, to which the former chair of the Blackpool trust was about to go. I finally got to see the minutes of the process, and I was told that the discussion panels had worked well but that there had been a difference of opinion about the candidates.

I was also then told by a number of people that the proceedings at the confirmation were rather irregular. According to governors, not only did Michael Hearty ignore the request from three governors for a secret vote, but he said that abstentions would count as a yes vote, which struck me as a rather strange position. For obvious reasons, and because the trust has larded around a lot of “confidentials” and “highly confidentials” on various things, I am not going to name the governors who have spoken to me, although they are perfectly prepared to talk to people about it. I will just quote what one governor said:

“A few governors, including the Chief executive were involved in the recruitment process. The rest of the Governors were asked to attend presentations and panels as part of the recruitment process. I requested, on a number of occasions, the criteria and weighting for the presentations and the panels, including set questions. These were not sent. At the presentations, pieces of paper were presented on which we could make unstructured comments. These were supposed to be weighted, however there was no…criteria to do so…Candidate were questioned at each panel. No questions were pre set in advance…We were asked to choose a candidate based on the activities. There was disagreement from a number of people…about the preferred candidate for Chair…At the council of governors meeting called to ratify the appointment there was discussion about the process and the selection. A paper ballot was refused and a show of hands insisted on.”

I have a further comment from someone who will again remain nameless, but was a senior manager at Blackpool Vic and in other organisations in the past. He wrote to me to say that the council of governors had always been viewed as an inconvenient necessity rather than a valued part of the trust governance arrangement. I found that very disturbing and concerning.

One might have thought at that stage that the trust, and certainly the nominations committee, would have paused for thought, given all these criticisms from the governors, but we have had the same process for the appointment of a new non-executive director, not the clinical director. Again, there were two panels of candidates, who again included the chief executive, Wendy Swift. I understand that the chair-designate was present on this occasion as well. Let us call the two candidates X and Y. Panel 1 had preferred candidate X by four votes to two, and panel 2 had gone for the same candidate unanimously, but the nominations committee had recommended candidate Y. It is not surprising, therefore, that many trust governors have so far not gone back to ratify this appointment in any shape or form.

Those are some of the issues that have come out of this, and I want to make one or two observations in conclusion. The chair of any health trust is crucial, particularly in the difficult circumstances in which the Blackpool trust finds itself: still requiring improvement, according to the Care Quality Commission, and hit hard by the strains of morbidity and the impacts of transience and demography, which put extra pressure on. We therefore need the process for the appointment of a chair or non-executive director to be as transparent and reaching-out as possible, not a cosy old pals act reinforced by groupthink. That is what has sometimes come up through the bureaucracy.

I am forced to conclude that the nominations committee thought that it could get away with evading proper scrutiny and transparency—that a thin veneer of irritated politeness attempting to conceal a determined effort to override public governors unless they were rubber-stamped, and indeed delaying so as to block out others such as myself from discussing these things, would do the trick. Well, it does not do the trick, and it is frankly an insult to all the hard-working staff who have worked their socks off in the past few months in recent crises at Blackpool Victoria Hospital.

The use of the words “confidential” and “highly confidential” by the lead governor, Sue Crouch, could be seen as an attempt to intimidate or gag governors who had legitimate concerns about the process. I am very concerned about that. As I say, I have circulated this letter to all my neighbouring MPs. My hon. Friend the Member for Lancaster and Fleetwood (Cat Smith) is unable to be here today, but she asked specifically for me to indicate that she shares my concern about the governance of the hospital. I understand that the hon. Member for Fylde (Mark Menzies), who is also away from Parliament, has said that he has a number of issues with the governance.

I ask the Minister to reflect on whether we need some form of inquiry into the process that went on at the Blackpool trust. I can assure him that some of the governors who have shared the concerns that I have are prepared to give evidence on that. We need some clarity as to the role of NHS Improvement, because it is supposed to be a backstop to addressing both stakeholder and individual concerns, but in this instance it seemed all too ready to accept the version of events from the people who had convened all this and the way they wanted it to go.

The principle that governors should not feel pressured or fettered is very important. If the Government want to encourage democratic involvement in the NHS—a real people’s NHS in its 70th year—there is a lot more to do to support and enable people to secure those rights of representation. Members of Parliament who raise legitimate issues of transparency should be able to get proper answers.

I have no idea whether Mr Pearse Butler, who was announced as the new chair on 18 May, will be a good, bad or indifferent chair of the trust, but I am clear that the process by which he was appointed was deeply flawed and not transparent.

May I begin by thanking the hon. Member for Blackpool South (Gordon Marsden) for securing the debate? I am pleased to see my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) in his place, and I know that both my hon. Friend the Member for Fylde (Mark Menzies) and the hon. Member for Lancaster and Fleetwood (Cat Smith) have expressed an interest in the issue.

The issues raised by the hon. Member for Blackpool South are clearly a cause for concern. While the CQC has not identified any governance issues in the trust, it is clear that the recruitment process for the new chair had a number of irregularities. One of the defining features of our approach to the NHS since the Francis report has been a willingness to face up to difficult issues. I therefore welcome the opportunity to focus on these irregularities and will address each in turn.

The previous chair of the trust resigned in January 2018 to take up the role of chair in another, nearby foundation trust, University Hospitals of Morecambe Bay. That caused a recruitment process for the chair of Blackpool Teaching Hospitals NHS Foundation Trust to commence in February this year. Autonomy in appointing executives is an important NHS foundation trust freedom. As a foundation trust, Blackpool Teaching Hospitals NHS Foundation Trust has the freedom to determine many of its own policies and procedures, including those relating to the appointment of a new chair.

The process followed by Blackpool is explained in the trust’s own constitution, which sets out the make-up of the nominations committee responsible for senior appointments. That committee is made up of six individuals, including the chair, or another senior role if the chair is the position being recruited for, as well as three governors and the chief executive. The sixth member is an independent assessor—in this case, the chair from another foundation trust, Salford Royal.

This is where the first irregularity arises. NHS Improvement guidance states that a foundation trust’s chief executive should not be permitted to vote on the appointment of the chair to whom he or she will be accountable. However, in this case, the chief executive was on the nominations committee for this role. While she did not breach the guidance, it is clear to me that if a chief executive should not vote on the appointment of the chair, it follows that a chief executive should also not be involved earlier in the appointments process, given the relationship of accountability that exists between chief executives and chairs of NHS trusts and foundation trusts.

However, I recognise that that instruction was deep within guidance dating from 2012, and there have been other pieces of NHSI guidance for foundation trusts regarding their governance arrangements that did not contain similar advice. There is an expectation that advice and guidance given to NHS trusts is clear and understandable. I have been informed that guidance on this topic is being refreshed by NHSI as part of the review of NHSI’s role in board appointments following Dr Kirkup’s findings in relation to Liverpool Community Health NHS Trust, to which the hon. Member for Blackpool South referred, and I have asked for the lessons learned to be fed into that refresh.

The chief executive did voluntarily stand back from the process after concerns were raised by the hon. Gentleman regarding her involvement. That was before the final interview was held for any of the candidates. Though it might be fair to ask whether involving the chief executive in the recruitment of the chair was the wisest course of action, it was within the trust’s constitution.

The second irregularity is the response from NHSI to the hon. Gentleman’s letter of 3 May, which fails to refer to its own guidance regarding the need to ensure that the chief executive is not permitted to vote on the appointment of a chair to whom he or she will be accountable. That is regrettable, and I understand that NHSI will write again to him to apologise for that error.

The third irregularity highlighted is the speed of the process. The nominations committee engaged recruitment consultants GatenbySanderson to provide professional services during the recruitment process. Part of that process involved emailing local MPs to inform them that the recruitment process was taking place. However, as the hon. Gentleman has highlighted, there was little time between that email being sent and the closing date for applications—10 working days over the Easter holiday period. The email did not include the closing date for applications, further hampering MPs’ ability to contribute effectively to the process.

I understand that the recruitment process began in February and concluded in May, with the new chair in post from 1 June. The recruitment company has confirmed that this process was run to a standard timeframe. That raises the question of why the local engagement, an important part of the overall appointments process, appears to have been rushed in this instance. There are clearly lessons to be learned, and I will be working with NHSI to ensure that its guidance is refreshed, and that it is clear in its advice to foundation trusts and trusts about the importance of local engagement.

The hon. Gentleman’s letter to the trust of 17 May referenced the trust’s council manual, pointing out that it did not include any reference to the chief executive sitting on the nominations panel. This document sits under the constitution of the trust, and I am satisfied that the explicit rules addressing this matter in the constitution have been followed. I have today received a personal assurance from the trust chief executive, Wendy Swift, that the trust will review its constitution to remove any ambiguity in respect of the appointment of the chair and non-executive directors.

Just to reassure the hon. Gentleman, I will read directly from that letter to me:

“I would like to reassure you that we had already taken a decision to review our Constitution to remove any ambiguity in respect of the appointment of the Chair and Non-Executive Directors.”

I will happily share that letter with the hon. Gentleman.

The independent assessor on the panel was the chair of Salford Royal NHS Foundation Trust. He agreed as to the candidate recommended by the nominations committee’s interview panel to the council of governors, and has not raised objections about how the process to recruit the new chair was run. I have had a personal assurance from the chief executive that there has been no contact between her and the chair of Salford Royal NHS Foundation Trust, and that she has not in any way tried to influence the decision-making process leading to the chair’s appointment.

The chief executive’s letter to me, dated 27 June—it might be helpful to the House if I quote it—goes on:

“I did know the new Chair on a professional basis prior to his appointment. We have worked within the same Health Economy for a number of years and attended the same strategic meetings and events. For clarity, the Chair was the Chief Executive of the Strategic Health Authority (2002-2006) whilst I was the Chief Executive of Blackpool PCT. After 2006, there were no personal or professional links until the Chair was appointed as the Chair of the University Hospitals of Morecambe Bay NHS FT (2014-2018).”

It is clearly difficult to reconcile the involvement of chief executives in the process of selecting chairs with principles of good governance. This appointment took place under the system of foundation trust autonomy put in place under successive Governments, and is a matter for the foundation trusts themselves. However, NHSI recognises that the role it plays in board appointments, both executive and non-executive, is not sufficiently clear and that there would be benefit in reviewing and codifying its oversight and support arrangements.

While any such changes should pay due regard to the fact that autonomy in appointing executives is an important NHS foundation trust freedom, I assure the House that I will be working with NHSI to ensure that the irregularities regarding this appointment do not occur in the future.

The hon. Gentleman has done the House a service in highlighting the clear irregularities in respect of this appointment. I hope that my response goes some way to reassuring him that NHSI will work with the Department to ensure that further irregularities do not occur.

Question put and agreed to.

House adjourned.