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I have implemented the changes suggested by dveos and RussH and am delighted to say that:
The test email now works
The status change template emails work
Attempting to send emails via the Candidates Home Page 1 List does not work, however this is not an issue as the system enables me to select and download them to a spreadsheet and I can send a manual email from that.
My sincere thanks to RussH and dveos for all your time spent on this and I hope that this will help others who I can see have experienced the same issue.