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Health Minister David Cunliffe has sacked the Hawke's Bay District Health Board and appointed a commissioner in its place - sparking allegations of "cronyism" and abuse of power.
Sir John Anderson will take over the governance of the DHB after Mr Cunliffe today said the board was suffering terminal problems, including internal divisions, scraps with management and a $7.7 million budget blowout.
But former board chair Kevin Atkinson has hit back at Mr Cunliffe saying his sacking of the board, which was only elected late last year, was an abuse of political power.
The sacking was punishment for the board's "refusal to endorse political cronyism and chicanery", he said on Radio New Zealand.
B ut a series of letters released today by Mr Cunliffe show a near complete breakdown in the relationship between board members and chief executive Chris Clarke.
In a letter Mr Clarke, who is set to return from sick leave on Monday, threatened to resign and said five of his seven senior staff were also consider resigning if there was no "significant governance change".
He said the DHB faced serious problems, but the board was preoccupied and distracted with a Health Ministry review of conflict of interest allegations.
The board this week sought to legally block the release of the report, which is expected to be highly critical.
The conflict allegations revolve around a failed $50 million contract bid by a private company, Healthcare New Zealand - of which board member Peter Hausmann is a director - for community services funded by the DHB.
It has been alleged Mr Hausmann did not fully disclose his relationship to the board, but he has denied wrong doing and accused the board of failing to manage the process properly.
Mr Hausmann today welcomed the appointment of a commissioner.
The various letters also show disputes over versions of board minutes and fresh conflict of interest allegations.
A letter from Mr Hausmann said the board had repeatedly refused to make the hard decisions that would have allowed it to stay within its budget.
Mr Cunliffe today said the board had acknowledged its problems but had not set out a clear plan to solve them.
"As my primary responsibility is to ensure that the people of Hawke's Bay have a first class and dependable health service I cannot allow this situation to continue."
Mr Cunliffe said Sir John's appointment was for the rest of the electoral term, but if he stabilised the situation quickly the Government could look into the possibility of fresh elections.
He said Sir John had indicated he will appoint accountant and Price Waterhouse Coopers partner Brian Roche as a deputy commissioner and two deputy commissioners to represent community interests.
Sir John, the former chief executive of ANZ bank, was also installed last December as chair of Capital and Coast District Health Board after it ran into high profile problems.
Mr Cunliffe last week warned the board over public comments critical of his actions and ACT health spokeswoman Heather Roy today said it looked as if the minister was trying to make an example of the board.
She said he had also undercut the board by ignoring several warnings on its worsening financial situation and refusing to make the four crown appointments the board needed to function properly.
National Party health spokesman Tony Ryall said the Government's treatment of the two troubled DHBs was inconsistent and Mr Cunliffe's actions appeared to be aimed at silencing potential critics of the Health Ministry report.
- NZPA
