Health chief had uneasy relations with Harney from start

The civil servant and the Minister: Outgoing secretary general Michael Kelly had been the most senior civil servant in the Department of Health for over four years when Ms Harney was appointed Minister for Health last September.

Sources close to Ms Harney said that on entering the Department of Health she very much wanted to develop a strong relationship with the management team in Hawkins House similar to the one she enjoyed with her most senior staff in the Department of Enterprise and Employment.

Other sources, however, maintain it was evident she compared Mr Kelly unfavourably with her former secretary general in the Department of Enterprise and Employment.

Sources close to Ms Harney say that shortly after her appointment he had accompanied her on a trip to New York to look at health facilities there and that the pair had got on well.

However other sources maintain that the relationship between the Minister and secretary general had been uneasy from the start.

Friends and associates of Mr Kelly and even other senior figures in the wider health service believe that within a reasonably short period he was being marginalised within the department. They argue that Ms Harney has increasingly relied on a small group of political advisers she had brought with her.

Relations deteriorated between Ms Harney and Mr Kelly over a briefing note for the Cabinet on the background to charges levied on elderly patients in public nursing homes which she believed contained serious omissions.

Mr Kelly also lost out in a contest last autumn over who should have the key roles when the Government's ambitious reform programme was put in place.

Shortly after her arrival in the department, the Government decided that the chief executive of the new Health Service Executive and not the secretary general of the department should be the accounting officer, the person responsible for the billions voted by the Dáil for health spending.

Sources close to Ms Harney maintain this was not personal against Mr Kelly but merely implemented a move decided originally by the Cabinet the previous year.

However the draft legislation drawn up by the Department of Health left responsibility for the accounting with the secretary general. This was reversed by Ms Harney.

According to informed sources, tension increased with Ms Harney not over the discovery that the nursing home charges were illegal but rather over what she was and allegedly was not told about the background to it.

In her public statement yesterday, Ms Harney referred to inaccurate and incomplete information provided by her to the Taoiseach, the Cabinet and the Dáil before Christmas based on briefings and a report which she had received.

Sources said last night there had been a major row between the pair over what Ms Harney believed had been ommissions in Mr Kelly's report given to Cabinet.

Sources said she had never been told that a letter had been drafted earlier in the year seeking legal opinion on the charges issue but that this had not been sent on to the Office of the Attorney General.

Sources close to the department said the relations between Ms Harney and the secretary general had been virtually non existent since the start of the year.

It is understood the Cabinet considered Mr Kelly's position and decided it would be preferable to allow him to serve out his remaining 18 months or so as a top-level civil servant in another area.

The sources said most staff were upset at yesterday's developments. There is anger among civil servants not just with Ms Harney over her treatment of Mr Kelly but in particular at her predecessor Mr Martin over his insistence that he was never fully informed of the issue.

Some sources said it had been the practice over many years to brief ministerial advisers on issues and that now the civil servants in the Department were being criticised for that.

Advisers to the former minister were at the meeting with health board chiefs in December 2003 at which the charges issue was discussed.

The Travers report recommends that briefing of special advisers or their attendance at meetings should, in future, not be considered or accepted as an alternative to direct briefings of ministers on important policy matters.