THE brouhaha at the Greater Glasgow Health Board requires public
explanation. Things may not be as they seem. On the face of it the
chairman, Mr William Fyfe, summoned his board and summarily dismissed Mr
Laurence Peterken, the general manager much reviled by sections of the
staff but highly respected among senior management cadres. Why should
this have happened? Mr Peterken's probity and competence are not in
dispute. Rumour has it that Mr Fyfe incurred expenses for travelling and
accommodation and that their level prompted a report from the general
manager. The auditors pronounced themselves satisfied with the claims
and the finance committee took no action. If that is an accurate
account, then Mr Peterken's actions were perfectly consistent with the
principles of public accountability and could in no sense justify his
summary dismissal.
The plot is a deal more complicated than that. Mr Fyfe, a chairman who
wants to be his own chief executive, made it clear even before he took
up office that he thought Mr Peterken should leave. It seems likely that
the board agreed a severance package with Mr Peterken and submitted it
to the Scottish Office. Unfortunately, because of the Public Accounts
Committee's recent strictures on the conduct of the Welsh Development
Agency, the Treasury has issued a number of new guidelines for the
public sector. These include a general prohibition on golden handshakes,
and the Minister, Lord Fraser, appears to have advised that there was no
legal basis for authorising Mr Peterken's presumably generous deal.
The summary dismissal, carried out while Mr Peterken was in London,
may have done him a rather odd favour. It may have created a legal
liability on the part of the health board, and given Mr Peterken a good
case in law for compensation. Thus it may have the effect of
circumventing the Treasury rule. A further embarrassment for the
Government is in the fact that Mr Fyfe's own company in Ayrshire was put
into receivership and then sold on. It hardly augurs well that the man
brought in to instil sound business practices in the health service
should have found himself presiding over such a messy dismissal. Mr
Peterken is an unlikely hero of the Labour Party but its MPs cannot be
expected to deny themselves the inevitable schadenfreude. A full
explanation is required, and Mr Fyfe must consider his own position.
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