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Health Minister David Cunliffe has sacked the Hawkes 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 board after Mr Cunliffe yesterday said the board was suffering terminal problems, including internal divisions, altercations with management and a $7.7 million budget blowout.
Former board chairman Kevin Atkinson hit back at Mr Cunliffe, saying his sacking of the board, which was elected only 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 in a Radio New Zealand interview.
A series of letters released yesterday by Mr Cunliffe showed a nearly 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 considering resigning if there was no ‘‘significant governance change''.
He said the board 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 health board.
It has been alleged Mr Hausmann did not fully disclose his relationship to the board, but he has denied wrongdoing.
The letters showed 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 yesterday 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 Hawkes 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 would appoint accountant and PriceWaterhouse 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 chairman of Capital and Coast District Health Board after it ran into serious problems.