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Public Audit Committee
Meeting date: 16 January 2025
Richard Leonard
Auditor General, would you like to add to that?
Public Audit Committee
Meeting date: 16 January 2025
Richard Leonard
Before I invite Stuart McMillan to put some questions to you, Graham Simpson wants to put to you a very specific question on that area.
Public Audit Committee
Meeting date: 16 January 2025
Richard Leonard
Okay. Do we know whether a non-disclosure agreement was attached to it?
10:30Public Audit Committee
Meeting date: 16 January 2025
Richard Leonard
Absolutely.
One of the things that stands out in the report is the case of somebody who was brought in from CMAL on a secondment basis. According to your description of it, they were originally engaged on secondment on a contract with a salary of £36,000 a year, which was then uplifted to £54,000 a year. Instead of being paid as a salary payment, the money was paid into a limited company, of which the employee was the sole director. That is quite extraordinary, is it not?
Public Audit Committee
Meeting date: 16 January 2025
Richard Leonard
I thank all our witnesses for their evidence.
Before we move into private session, I remind everyone that this is our final Thursday morning meeting. We will switch to Wednesday morning meetings from next week onwards.
10:48 Meeting continued in private until 11:15.Public Audit Committee
Meeting date: 16 January 2025
Richard Leonard
Mr Hobbs.
Public Audit Committee
Meeting date: 16 January 2025
Richard Leonard
Okay, thank you. I am conscious of the time, so I will move on. Colin Beattie has some questions to put to you.
Public Audit Committee
Meeting date: 16 January 2025
Richard Leonard
Okay. Thanks for clearing that up.
I want to go back to the cases involving settlement agreements. You said that there had been three that were above the threshold and two had not been approved. The Scottish Government had clearly taken a dim view of those, and indeed
“has not provided retrospective approval”.
Can I take you to the case that it did approve? In paragraph 14 of your section 22 report, you say that the former chief executive’s employment was terminated “citing unsatisfactory performance”. However, paragraph 14 of the Scottish public finance manual says quite clearly that
“Settlement Agreements should not be used to deal with poor performance”,
so why would the Scottish Government approve such a settlement?
Public Audit Committee
Meeting date: 16 January 2025
Richard Leonard
Thank you. I want to pick up on a couple of points relating to Stuart McMillan’s questions to you. Back on 1 June 2023, Mr Miller, the chair of the board of FMPG, had an exchange with the committee in which we asked him about the performance bonuses that seemed to prevail at the time, particularly among the senior management team. He said that they were not performance bonuses but retention payments. I suppose that there are two ways of looking at that. Is it the case that there is no longer a retention payments regime so people are leaving the business en bloc, or does some kind of performance bonus system still exist that applies to members of the senior management team at FMPG?
Public Audit Committee
Meeting date: 16 January 2025
Richard Leonard
I accept that process was followed, but the Scottish public finance manual has a certain status, does it not? The situation is probably a reflection on previous inquiries, including those that this committee has conducted, into situations where people have performed badly and, to use a colloquialism, have been rewarded for bad behaviour. They have walked out of a public sector organisation with a large amount of public money by way of a settlement agreement when, in most objective observers’ eyes, they should not have received some kind of reward but should have left with no extra payments other than those that they were contractually due.