Published: 06/01/2005, Volume II5, No. 5937 Page 7

The non-executive board of Royal Wolverhampton Hospitals trust has been ordered to stand down over its part in allowing the trust to amass a£10m deficit.

The decision by the NHS Appointments Commission to draft in an interim membership follows a damning independent review into financial management and governance at the trust.

The review, chaired by Professor Robert Tinston and commissioned by Birmingham and the Black Country strategic health authority, found that financial stewardship at the trust had failed, and that the situation had been compounded by a board which did not challenge the position robustly.

The trust's interim finance director Peter Hollinshead, said the board had not been provided with regular reports setting out details of the trust's current and forecast position with recommendations about what action should be taken. He said the need for a finance director to provide such information was 'common sense'.

Former finance director Andrew Wooding resigned from the trust in July after management consultants forecast a potential£17.4m deficit for 2004-05.

The review said that he and former chief executive Mark Hackett 'each bear individual responsibilities' for the trust's financial plight.

Mr Hackett was appointed chief executive of Southampton University Hospitals trust in June and was replaced by David Loughton.

The review found Mr Wooding had relied too heavily on non-recurring monies to balance the books and had used unusual - in some cases 'unacceptable' - accountancy practice to show a bottom-line surplus.

His decision to run a 'significant deficit reserve' without measures in place to replenish it was 'unprofessional' and meant the trust's deficit was concealed from managers, Professor Tinston found.

However, the trust board was criticised for not challenging the financial position or having 'no appetite to discuss it'.

Trust chair Professor Mel Chevannes resigned at the end of November.