LEADING ARTICLE : The lessons of Yorkshire's scandal

There may be some silver lining to the sad and sorry tale of mismanagement detailed in yesterday's National Audit Office report on events in the former Yorkshire region of the NHS.

What went on in Yorkshire in the name of improving the public sector's efficiency is little short of a scandal. The report lays bare a string of occasions when the region's executives acted outside their powers, particularly in the way they paid relocation expenses and severance payments. Conflicts of interest were not declared when contracts were being awarded. Serious questions have been raised over the way the region handled several deals, including a land sale.

It seems it was not just the executives most directly involved who were to blame. The report refers, obliquely to "a climate" in the NHS at the time, the early Nineties, when managers were being urged to adopt a more flexible and entrepreneurial approach as the NHS reforms were being driven through. The managers under fire for their actions in Yorkshire, seem to have come to the mistaken view that an entrepreneurial approach to management allowed them to bend public sector rules of accountability.

Nor is the public likely to be reassured by other findings. Much, though not all, of the monies improperly paid, at least pounds 450,000, if not more, look unlikely to be reclaimed. The NHS is clearly constrained in pursuing disciplinary action - even when it is plainly recommended by an inquiry such as this - when employees have moved to employment in another part of the health service. It is worse than that. The inquiry indicated that one of those criticised in the report probably should not be employed in the NHS again. But it turns out that the NHS Executive does not have the powers to ensure that.

All these are issues that the Public Accounts Committee will doubtless want to pursue when it has Alan Langlands, the NHS Chief Executive, before it soon for a hearing on the report.

But there is a silver lining which lies chiefly in the prompt and public action Mr Langlands has taken. At the time the scandal came to light when the NHS accounts for the region were qualified last year, there must have been a temptation to deal with matters as quietly as possible.

Instead, Mr Langlands not only ordered a full inquiry but has helped ensure that it is published in full, with names, dates and pack-drill. There could not be a clearer signal to the NHS that he is serious in his determination that it "should uphold the highest standards of probity and accountability at all times".

Given the plethora of new guidance and rulings on probity that the NHS Executive has recently issued, the chances of what happened in Yorkshire happening again must be reduced. The NHS climate is changing. Yet in properly insisting on the highest of standards and the correct observance of the rules, the NHS must not slip back into the bureaucratic inertia that has characterised it in the past.