42. In January 1997 Ms Genista McIntosh took up the post of Chief Executive of the Royal Opera House in succession to Sir Jeremy Isaacs.[136] She arrived with high hopes and amid high expectations.[137] Within five months she had left the Royal Opera House and her replacement by Ms Allen had been announced. We explored these developments in some detail in our hearings. In addition, we have received and published the Department for Culture, Media and Sport's official minute of the Secretary of State's meeting with Lord Chadlington-initially classified "Confidential" but published with the welcome agreement of the Secretary of State-and Lord Chadlington's own notes of the meeting.[138] We have also examined additional correspondence from Ms Genista McIntosh and Lord Chadlington. We have decided to keep this confidential, since little purpose would be served by a blow-by-blow account of these events and some elements of the evidence are not easy to reconcile with others. We confine our comments to those matters which raise issues of public concern.

  43. Not long after assuming her post, Ms McIntosh became "extremely unhappy in the job". She attributed this partly to the managerial and structural weaknesses of the organisation which we have already discussed and partly to "a mismatch between me and the organisation". She found a sense of "ownership" within the House which she believed would make certain changes very difficult. She concluded that her unhappiness could have consequences for her health and that "had I continued in my job I might well have become ill".[139] Lord Chadlington told the Committee that he sought to dissuade Ms McIntosh from resigning her post when the idea was first mooted in late April, but that he became convinced by early May that her health would be endangered if she continued in post. Her resignation was accepted on 7 May. She said that she wished to depart in less than her formal six-month notice period and Lord Chadlington decided that her departure should be with immediate effect.[140] The press notice of 13 May stated that she was leaving for health reasons, although before the press notice was issued, Ms McIntosh had questioned the advisability of giving this account.

  44. From late April, when Ms McIntosh's departure seemed a possibility, Lord Chadlington began secret consultations with Ms Allen, the Secretary General of the Arts Council, but not that organisation's lead assessor of the Royal Opera House.[141] At a meeting on 30 April, Lord Chadlington asked Ms Allen both to consider being a candidate for the post if it became vacant and to advise on the process of appointment. Ms Allen had been Lord Chadlington's "preferred choice" for the post originally, but her name had not gone forward for selection in view of her own initial role on the selection board and her support for Ms McIntosh's candidacy.[142] Although the Funding Agreement between the Arts Council and the Royal Opera House stated unequivocally that the House "should advertise nationally for all vacancies for senior appointments", Lord Chadlington claimed to be anxious to avoid a repeat of the prolonged process preceding Ms McIntosh's appointment, particularly in view of the management challenges associated with redevelopment and closure. He therefore argued for a new appointment as a matter of urgency.[143] In Lord Chadlington's words, Ms Allen's advice on this occasion was that "it would be inappropriate for you to discuss this matter with the Arts Council. You must discuss this matter instead with the Department of National Heritage, and they should be consulted as to how to proceed with the process of appointment."[144]

  45. Ms Allen justified this advice to us on the following grounds: it was for her to broach first with Lord Gowrie the possibility of her own departure, but this could not be done immediately because Ms McIntosh might decide to continue in her post; the Department was well-placed to advise on the process of appointment, but did not have a direct stake in the outcome. In contrast, any discussion with the Arts Council would have become immediately personalised around her own possible departure.[145] Yet the Walker-Arnott Report observes that any consultations with the Department about the appointment were "a matter of courtesy, since legally and formally it was the Arts Council of England that had rights as regards the process of making senior appointments".[146] We found Ms Allen's convoluted explanation of her actions entirely unconvincing. After Ms McIntosh's resignation and Lord Chadlington's meeting with the Secretary of State on 7 May which we consider below, Lord Chadlington informed Ms Allen that the post was available. She told Lord Gowrie on 8 May of her intention to accept the job offer if made, but requested complete confidentiality until the offer was confirmed. Lord Gowrie told us that he was "gob-smacked" by this news.[147]

  46. We can understand Lord Gowrie's dismay at Ms Allen's action. Her original advice to Lord Chadlington to consult the Department was flawed: the Department had no role in the appointment; the Arts Council required appointments to be made by advertisement and it was for the Arts Council, if it thought it appropriate, to release the Royal Opera House from that requirement. Given her own personal interest in the matter, Ms Allen should have advised Lord Chadlington to consult Mr Graham Devlin, the then Deputy Secretary General and lead assessor for the House, about the method of appointment.[148] She should separately and without delay have informed Lord Gowrie that she had been asked to be a candidate for the post if it became vacant. Given her experience of public office, Ms Allen's conduct fell seriously below the standards to be expected of the principal officer of a public body whose loyalty should first and foremost be to the organisation which employs her.

  47. Following the advice he had received, Lord Chadlington sought to arrange a meeting with the Secretary of State, which was done by fellow Director Mr Robert Gavron. Mr Smith agreed to hold the meeting requested by them on 7 May, the same day, even though the purpose of the meeting had not been specified.[149] At the meeting, Lord Chadlington explained the circumstances of Ms McIntosh's departure as he saw them and the extended process which had led to her original appointment. He explained his intention to appoint Ms Allen in her place if this could subsequently be agreed with Lord Gowrie and his own Board. He had previously agreed with Ms Allen she could "probably be free from the Arts Council, have a reasonable period between posts, and take up her duties at the Royal Opera House at the start of September". He referred to the appointment of a new Finance Director with effect from 1 July and told the Secretary of State that "by late summer [we] should have a new team fully in place, ready to go". The Secretary of State expressed a number of concerns and qualifications about the proposed course of proceeding. Nevertheless, Lord Chadlington recorded in his notes, and subsequently informed the Committee accordingly, that, in the very difficult and particular circumstances, the Secretary of State was "happy".[150]

  48. The Secretary of State's recollection of the conclusion of the meeting, and the minute prepared by the civil service, are somewhat at variance with Lord Chadlington's account. Mr Smith denied expressing the "happiness" attributed to him by Lord Chadlington with the proposed course of proceeding; indeed, he said to us that he was "extremely unhappy about many of the circumstances that had arisen". According to the minute prepared by the Secretary of State's officials, the meeting ended with the Secretary of State saying that "he would not raise any further objections" and Lord Chadlington agreeing "to make clear the Secretary of State's reservations to Royal Opera House Board members and the Arts Council when he presented the case to them". The Secretary of State also told us that he was surprised to learn after the meeting that Ms Allen would not take up her post until September. He had not been told this at the meeting and, had he been aware of this element, he "would have questioned even more strongly the circumstances of urgency which they were pressing upon me".[151]

  49. Mr Smith had been Secretary of State for only four days when this meeting took place. [152] He should have sought more information in advance about the matters to be raised at the meeting. There was a case for adjourning or postponing the meeting to satisfy himself of his own powers in relation to the appointment, which were non-existent, and the Arts Council's instructions on the method of appointment. Once he knew that Lord Chadlington wished to discuss with him the transfer of Ms Allen from the Arts Council of England to the Royal Opera House as Chief Executive, he should have consulted further about the propriety of her departure from the Arts Council in these circumstances. We also note that the outcome of the meeting should have been confirmed in written exchanges, in which case the subsequent problems might not have arisen. The different accounts of the meeting by the participants almost certainly arise from different impressions of what had been agreed rather than from any intention to mislead. Lord Chadlington, possibly through inadvertence, failed to make it explicit that Ms Allen would not take up her new post until September. This meeting was unsatisfactory for various reasons and all sides would have been better served if the Permanent Secretary had advised the Secretary of State as to his powers in relation to Ms Allen's appointment to the Royal Opera House, which were nil, and as to the matters of propriety. Both sides in this vital meeting came away with very different impressions of what had been agreed.