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Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 4 May 2021
  6. Current session: 13 May 2021 to 8 November 2025
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Displaying 3464 contributions

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Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 9 January 2025

Richard Leonard

As part of the audit, have you asked the Scottish Government why it did not take a more proactive approach?

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 9 January 2025

Richard Leonard

Stuart McMillan has a question on this area, but I will ask him to ask it after I have asked my couple of questions, because then he will have the final block of questions.

I will go back and explore a little more the details of the former chief executive officer’s contractual arrangements.

In paragraph 18 of the report, you described that the former CEO was initially appointed in November 1999 as the water industry commissioner. I presume that there was then a reform of the structure, which led to the establishment of the Water Industry Commission, and he was appointed as the chief executive officer of that in 2005.

In the following paragraph, you talk about the CEO’s “initial contract”. Is the initial contract the one from 1999, or is it from 2005?

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 9 January 2025

Richard Leonard

That is fine. That may be for others to answer.

My final question is one that you might be able to address. In March 2024, there was an amendment to the Scottish public finance manual regarding the treatment of settlement agreements when an accountable officer is the subject of a settlement agreement. Do you have a view on whether that amendment is sufficient to address such situations in the future?

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 9 January 2025

Richard Leonard

Thank you. I am delighted to invite Stuart McMillan to put some questions to you. Over to you, Stuart.

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 9 January 2025

Richard Leonard

Thank you for the evidence that you have provided to the committee. Some important matters have been placed on the public record, including revelations that—dare I say it—perhaps give us a bit more evidence than is contained in the section 22 report itself. Auditor General, I thank you, Carole Grant and Richard Smith for your time and for the information that you have given us.

I move the committee into private session.

10:38 Meeting continued in private until 11:19.  

Public Audit Committee

Decision on Taking Business in Private

Meeting date: 9 January 2025

Richard Leonard

The second item on our agenda is for the committee to consider whether to take agenda items 4 and 5 in private. Are we agreed to do so?

Members indicated agreement.

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 9 January 2025

Richard Leonard

Why then, within two years, was a revision proposed to that contract?

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 9 January 2025

Richard Leonard

One of the other things that strikes me about this is that the initial contract from 2005—which provided the basis for the departure of the former chief executive—gave a contractual entitlement to six months’ pay or salary on resignation, but provided 12 months’ pay or salary in the event of dismissal. Under those terms, it is conceivable that somebody in that position could be sacked for gross misconduct and be entitled to more notice pay than somebody who had handed in their resignation. It is extraordinary. I have never seen anything like that before in my life.

10:15  

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 9 January 2025

Richard Leonard

I want to go back to something quite extraordinary that you told us a few minutes ago. You said that the limit on expenses—presumably for travel, subsistence and business entertainment, as WICS has previously described it—was not adjusted, but removed altogether by the former chief executive officer, who was the accountable officer. Was that approved by anybody—the chair of the board, the chair of the audit and risk committee, the sponsor division, or the deputy director? After all, the committee’s concern throughout much of this has been not just that these things happened, but that they were allowed to happen.

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 9 January 2025

Richard Leonard

When you gave evidence to us in the equivalent session in February of last year in relation to expenses and so on, you said:

“We do not see that type of activity in other audits.”—[Official Report, Public Audit Committee, 8 February 2024; c 29.]

Last year, we were dealing with a section 22 report with an almost unheard of list of questions about the way in which the organisation was conducting itself, the way it was allowing governance arrangements to drift, allowing the expenses regime to be run and allowing unreceipted claims to be processed. We are still in that territory in this year’s audit, are we not?