A suspended hospital trust chief executive - already accused of “serious failings” in his previous post - led his present organisation towards “corporate failure”, an independent review has concluded.

Royal Cornwall Hospitals trust chief executive John Watkinson and board members during 2007 and 2008 “failed to sufficiently follow the spirit of the codes of conduct for NHS boards and managers”, according to the report.

It was commissioned by the trust’s board and NHS South West after a similar review of management during Mr Watkinson’s time as chief executive of Bromley Hospitals trust accused him and other board members of serious failings.

The report said leadership and management at Royal Cornwall was moving “towards corporate failure”.

Mr Watkinson has issued a statement disputing the latest review and has filed a claim to Exeter employment tribunal against the trust, where he remains suspended as chief executive. HSJ understands the claim seeks to have action taken by Mr Watkinson in relation to the centralisation plans for specialist gastro-intestinal cancer services designated as a protected disclosure under whistleblowing legislation.

Earlier failures

The report’s findings have raised questions about why Mr Watkinson was appointed in Cornwall despite failures at Bromley. He was named as the new chief at Cornwall in October 2006 and started at the trust on 1 January 2007.

Evidence of bad financial management at Bromley in the October 2008 report included the trust’s £15.8m deficit in 2005-06 and documents showing South East London strategic health authority identified problems with financial management in mid 2006.

A press release published by the Cornwall trust in October 2006, including comments from NHS South West chief executive Sir Ian Carruthers, said Mr Watkinson had “overseen vast improvements in the clinical and financial performance of the trust [in Bromley]”. He had “delivered improved financial management” at Bromley, it said.

This week NHS South West chair Sir Michael Pitt defended the SHA’s procedures. He told HSJ: “Wherever the SHA is involved with appointments we undertake careful examination of references and ask around about the suitability of candidates. I am sure that was the case [for Mr Watkinson].

“There would have been written references and informal conversations to make sure that the right person is being appointed.”

Sir Michael said that, while the review published this week had been prompted by the Bromley report, the SHA had already identified problems at the trust.

“The SHA had been having ongoing conversations with [the trust] and there was concern about the performance of the trust, but the idea of having an independent review was triggered by the publication of the [Bromley] report.”

Torbay Care trust chief executive Peter Colclough has been seconded as chief executive at the trust since February. Martin Watts, a non-executive director from 2006 to 2007, was appointed its permanent chair last week.

Medical director Dominic Byrne has resigned because he did not accept the conclusion of the report, the trust said.

Mr Watkinson said in a statement: “The report is flawed because it contains factual inaccuracies and unbalanced reporting. I have provided to the review team responses that comprehensively correct the inaccuracies and imbalance in their report, but these representations have been ignored in all but trivial ways.”

Mr Watkinson said the trust’s surplus was £1.2m in 2007-08, after a £36m deficit the previous year, and pointed to improvements including the proportion of patients waiting fewer than four hours to be seen in accident and emergency.

FINDINGS FROM THE REVIEWS

Bromley

  • Weak financial planning, control and oversight
  • Failed to heed warnings on financial position
  • “Wanted to report good news”
  • Relied on “technical accounting manoeuvres”, optimistic assumptions and borrowing
  • Relationship with primary care trust had “enduring difficulty”
  • Acted “immaturely” with “inappropriate internet material” circulated by email
  • Medical staff reported disengagement with management
  • Passion for developing patient care standards
  • Praised for responding to access targets and increased activity
  • Good clinical governance system

Cornwall

  • Relationship with PCT “significantly deteriorated” over plans to centralise some cancer services
  • “Over-confident and unrealistic picture of [trust’s] achievements”
  • Weak central financial management
  • Perception of a “team within a team” of Mr Watkinson and directors he appointed from Bromley
  • Mr Watkinson’s humour said to be inappropriate with offensive remarks
  • “Jokey” or “laddish” team culture
  • Healthcare Commission self certification submissions “flawed”
  • Mr Watkinson’s approach welcomed by some medical staff and public and patient groups
  • Consultants welcomed new management arrangements with involvement of doctors

In HSJ, this story wrongly included a photograph of Professor John Wilkinson, director of the North East Public Health Observatory, who has no connection with this story or the hospitals concerned.We would like to apologise to Professor Wilkinson for the error.

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