`Better a philistine who can add up than this incompetent lot of buffs and ballet lovers'

The Government last night promised "planned change" to the running of the Royal Opera House following a damning report by a Commons select committee. David Lister, arts news editor, examines MPs' accusations of mismanagement and incompetence.

The chairman, chief executive and board should resign "with immediate effect". A financially acute "philistine" should be appointed to run the show. If the board and chief executive don't resign, the Government should cut off all public money.

That is the staggering conclusion of the Culture, Media and Sport select committee inquiry into the Royal Opera House. The language is colourful, the analysis damning, the recommendations dramatic. And the invective left senior figures at the ROH shaking in disbelief.

The committee meanwhile expressed its own disbelief at the business practices of the ROH which meant that no balance sheets or cash flows could be produced for them. The committee was also highly critical of the previous Covent Garden regime headed by Sir Jeremy Isaacs.

Yesterday Chris Smith, Secretary of State for Culture, broke precedent by reacting immediately to a select committee report.

He said he shared the committee's view "that substantial changes are now required", but added: "I am concerned that overnight and precipitate change, either in the management of the Royal Opera House or by an instant withdrawal by the Arts Council of fianncial support for the Royal Opera House, would in fact endanger your and my underlying objectives. I am anxious that planned change should now take place."

It seems unlikely that Mr Smith will pre-empt the inquiry being undertaken by Sir Richard Eyre into the ROH. Sir Richard will not report until next May.

Staff at Covent Garden have written a letter, published in today's Independent today, supporting Mary Allen, their chief executive, who is vilified in the report. Neither Ms Allen, nor Lord Chadlington, her chairman, intend to resign over the report.

Ms Allen said: "I entirely reject the criticisms in the Committee's report of my conduct at the time of my appointment in May this year." Referring to how she was made chief executive without the post being advertised, when she was at the time chief executive of the ROH's funding body, she said: "If it was a mistake, it was an honest one."

The committee, chaired by Gerald Kaufman, recommends that Mr Smith appoint an administrator to take the place of the board and the chief executive of the Royal Opera House for the two year remainder of the closure period - the recommendation which Mr Smith has so clearly and quickly rejected. "Should the board and the chief executive decline to accept the committee's recommendation that they resign, we recommend the Secretary of State make clear to the Arts Council that he expects them to cease payments of grant- in-aid to the Royal Opera House forthwith," the report continues - a further recommendation which was effectively dismissed by the Secretary of State.

The report says: "The administrator must be chosen for his or her business skills; we would prefer to see the House run by a philistine with the requisite financial acumen than by the succession of opera and ballet lovers who have brought a great and valuable institution to its knees."

The ROH is accused of "incompetence", "disastrous mismanagement" and "a deplorable lack of financial information".

It says: "In the light of the fact that the ROH has received pounds 98 million of taxpayers' money in the last five years, we are astonished that the Arts Council seems to have expressed no concern at this state of affairs. There is no future for the Royal Opera House unless someone accepts responsibility for the sorry train of events we have described. In addition, we question the vigilance of the Charity Commissioners."

But it is Mary Allen, who this summer took up the post from her previous job as Arts Council general secretary without a formal selection process, or the post being advertised, who is singled out for particular criticism. The report says: "We found Ms Allen's convoluted explanation of her actions entirely unconvincing."

The committee, whose report was unanimous, recommended that the "inappropriate" Ms Allen be removed from Sir Richard Eyre's working group, currently looking into the future of the Royal Opera House and its companies.

The select committee was scathing about arrangements made by Sir Jeremy Isaacs and Sir Angus Stirling, his chairman, for the closure period.

"The disastrous misjudgements made then meant that the companies were condemned to a nomadic option which could have been avoided and which shows signs of being financially disastrous," the report said.

"The failures of the board in 1995 are responsible in considerable measure for the House's current crisis."

cast of characters in a covent garden drama

SIR JEREMY ISAACS

He left the Royal Opera House with a knighthood and an contract giving him pounds 10,000 a month for nearly a year after he departed. But Sir Jeremy was the man behind the closure plans, criticised by the committee as "abysmal", and he and his chairman Sir Angus Stirling oversaw many of the managerial structures that the new regime inherited. He worked hard at ROH to end restrictive union practices and build up the companies. But his complaints of underfunding as the root of all problems are undermined by criticisms of him in the report.

MARY ALLEN

A former actress who once appeared in The Rocky Horror Show, she must think she is now living it. She ran the Watermans Arts Centre in Brentford before moving to the Arts Council where she was thought to be an effective secretary-general. But the manner of her move to the Royal Opera House - a post not advertised - shocked many including her Arts Council chairman, Lord Gowrie, who rued afterwards that he had "bonded too closely with her". Her management skills which are already beginning to put the ROH finances in order might yet see her through this crisis.

LORD CHADLINGTON

Aka Peter Gummer, brother of John Selwyn and head of Shandwick, one of the biggest public relations firms nd a former adviser to the Tory party. Smooth and unflappable, as chairman of the ROH, he too was involved in dispensing the pounds 78m grant to the ROH when he was in charge of the Arts Council lottery fund. Chris Smith will not lightly forgive his bulldozing him into accepting the Mary Allen appointment. Lord Chadlington says he is determined to continue at the ROH, but the odds of a long stay under Labour are not good.

VIVIEN DUFFIELD

The heiress daughter of the businessman Charles Clore, the founder of the Sears empire, the 51-year-old chief fund raiser at the ROH is the best in the business. Insiders say hers has been one of the most powerful voices in Covent Garden, and in warning that sponsors and other Covent Garden regulars would not follow the companies to Hammersmith and other London venues she has been proved right. The select committee goes out of its way to exclude her from criticism.

LORD GOWRIE

The earl who grew up at Windsor Castle and was a Tory arts minister before resigning because it did not pay well enough. A director of Sotheby's, he was the chairman of the Arts Council when the ROH got its massive grant and anticipated a backlash against lottery awards to high-art institutions by making sure the ROH got in first. He was "gobsmacked" when Mary Allen left for the ROH, and said afterwards he regretted "bonding too closely with my chief executive." He will quit the Arts Council for reasons unrelated to the opera house inquiry.