Seòmar agus comataidhean

Item 2 is further consideration of the 2023-24 audit of UHI Perth. I am pleased to welcome our witnesses. Partly because of the weather, some are joining us online. I begin by welcoming Catherine Etri, who is the interim principal and chief executive of UHI Perth. Alistair Wylie is the interim chair of UHI Perth and he is joining us online. You are very welcome and I thank you for taking the trouble to come along today. We are also joined in the meeting room by Lynn Murray, who is the depute principal (operations) at UHI Perth.

Joining us online for obvious weather reasons is Vicki Nairn, who is the principal and vice chancellor of the University of the Highlands and Islands. Good morning, and thanks for being with us. Vicki is joined by Mike Baxter, who is the chief financial officer at UHI. Welcome to you.

Alistair, Vicki and Mike, if there are any points that you want to come in on particularly, put in the chat that you want to join us and we will do our level best to pick that up and invite you in.

I will complete our welcome to witnesses by welcoming Jacqui Brasted, who is the director of access, learning and outcomes at the Scottish Funding Council. Alongside Jacqui is Tiffany Ritchie, who is the acting director of finance at the Scottish Funding Council.

Please do not feel that you have to answer every single question that we raise. We will try to manage proceedings as effectively as possible. As you would expect, we have got some questions to put to you but, before I get to those questions, I invite Catherine Etri, Vicki Nairn and Jacqui Brasted to give us short opening statements, in that order. I invite Catherine to open proceedings for us.

Do you accept what the Auditor General told us when he gave evidence in October? He was quite stark. He said:

“I ... cannot recall, from my time in this role and during my career of auditing public bodies in Scotland, an organisation that has not prepared an annual budget.”—[Official Report, Public Audit Committee, 8 October 2025; c 5.]

Okay, I will come back to that in a moment. Vicki Nairn, as the principal and vice-chancellor of UHI, do you accept the findings of the Audit Scotland report?

That is out at midnight tonight, Auditor General, is it not?

Yes. A plan and a strategy would, I presume, reflect the shift in resourcing that has been spoken about for a long time but has not necessarily been delivered.

In the interests of time, I will move on to another area. You said in your opening statement, Auditor General, that, despite more money going into the national health service and more staff being employed by it—you choose as a baseline 2019 and say that there have been additional resources of £3 billion and 20,000 additional staff members in the workforce—sustainability in the health service is not improving. Could you explain that for us?

Okay, I will look a little bit more closely, not just at what happened, but at the approach that led to the section 22 report.

You might have seen that, before Christmas, we took evidence from the former chair of the board, Graham Watson, and from Iain Wishart, who was former vice-principal of operations at UHI Perth. As a follow-up to their oral evidence, they wrote to us giving further testimony of how things got to where they did. Mr Watson said in his 4 December letter to me, as the convener of this committee, that

“In the Board’s view, it would have been neither prudent nor good governance practice to agree a deficit budget when there was no certainty of how the deficit would be funded”.

As a result, no budget was agreed. Lynn Murray or Catherine Etri, does either of you want to comment on that?

Turning to Catherine Etri, as the accountable officer, do you agree with Tiffany Ritchie’s point that it is a fundamental part of the Scottish public finance manual that a public sector organisation sets a budget?

Okay—thank you very much.

I am going to move things along now and invite Joe FitzPatrick to put some questions to you.

Thank you very much, and a belated happy new year to you, too.

I will start by looking at progress through the lens of your annual reports, Auditor General. To some extent that is captured in appendix 5 of the report that the committee has before it today, but when I went back to look at the equivalent report from 2024, I saw that you made recommendations that certain things should happen, and I want to check the extent to which progress on those fronts has been made.

One of your top recommendations was that there ought to be a capital investment and asset management strategy. Is there one? You talked about the need for a revised medium-term financial framework for health and social care. Has there been one? You also talked about the importance of lessons being learned from the negotiations following the contractual end of the private finance initiative/public-private partnership contracts, which have been a long-standing feature of the NHS. Could you update the committee on the progress on that front?

The SFC has been mentioned. Jacqui Brasted, what is your view of what happened with the failure to set a budget? I know that you said in your submission that, because of the nature of the regional strategic board, you did not have direct access into the college.