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That is a fair challenge from Mr Mason. In the past months, I have engaged with Universities Scotland on the question of ONS classification and the careful balancing of the sensitivities around that. In preparation for discussing amendments and going through the legislative process, my Government advisers and I have collectively thought carefully about that balance. We just need to be careful about the cumulative effect that I have described.

I emphasise that our training providers and managing agents do important work in supporting the economy and apprentices. However, I absolutely appreciate the committee’s concerns, and I think that it is legitimate to probe the percentage of fees and those considerations. Of course, we can talk about that more when we come to group 8. To answer George Adam’s point, I think that we, and the SFC, should continue to consider and probe the issue. However, it is important to leave to the SFC the discretionary power to determine the appropriate levels of payment.

I thank Willie Rennie for making those points, and I agree with what he has stated.

If members are content, I will move on to amendment 54. I see the point that Ross Greer is trying to address with it, but I cannot support it as currently worded. I ask him not to move it so that I can consider it further ahead of stage 3.

I am happy to accept Ross Greer’s amendment 55, as the provision adds further weight to the imperative of good governance without crossing into determining operational matters. However, I cannot accept amendment 62, which risks overstepping into operations and funding decisions of universities. We must also consider what “adequate funding” means in the context of a diverse range of associations and unions, some of which are aligned with the National Union of Students Scotland while others are not.

I make it clear that I support the principle of Ross Greer’s amendments 61 and 61A to 61E. However, as he will be aware, and as I have stated, unfortunately, employment law is reserved to the United Kingdom Parliament, which severely limits what this Parliament can do in the areas that are covered by the amendments. Obviously, I wish that the Parliament had full legislative power in those and other areas. However, we might look to explore whether there is a less direct way of challenging excess pay. I ask Ross Greer not to move those amendments today to allow me to consider the matter further.

It is important to emphasise the differentiation, in that grant conditions are not limited in the same way as legislation or the competence of the Parliament. That is the key difference with grant conditions, which Ross Greer raised earlier. There is obviously a difference between that and primary legislation.

Okay, but I would like to make progress, if possible.

We have considered the issue and I had to think very carefully, particularly with regard to the reservation of employment law. I have also listened carefully to the arguments that Mr. Greer has made at committee today. Points around pay differentials and income inequality are of significant interest to me and are pertinent to all our society and to the matters that we consider collectively as parliamentarians.

I stand by the arguments that I have made so far but would like to give the matter further consideration ahead of stage 3, given the keen interest that Mr. Greer has expressed in the arguments that have been related at committee today. I would be happy to undertake further consideration of those issues ahead of stage 3, and that is all that I will undertake to do today.

Yes.

Yes.

There is a difference between the two things. We consider the grant offering of awards of public resource more widely in relation to budget and other circumstances, but we must be very careful about people’s conditions and pay with regard to legislative competence. That is where the employment law reservation is absolutely pertinent. Of course, it would be better if the UK Government devolved employment law to this Parliament, because we could then consider those matters more widely without being restricted.

I move to Maggie Chapman’s amendments 52, 53 and 57 to 60. I appreciate the points that have been raised, including by the convener, and I am happy to consider what more can be provided with regard to the balance after this meeting. However, I have already mentioned the risk of individual amendments in this group potentially having an inadvertent and undesirable consequence in relation to ONS reclassification. I also must give consideration to the cumulative weight of most of the other amendments in this group and to what their passing would mean for the classification of our institutions. I fear that that would be the impact of nearly all of Maggie Chapman’s amendments in this group.

I appreciate why Maggie Chapman is seeking to introduce those sorts of conditions. However, I am conscious that we should respond to the circumstances at the University of Dundee by addressing those specifically rather than legislating for all circumstances, as that would have serious potential consequences in the long term for all our institutions.

I also contend that some of Maggie Chapman’s proposed statutory conditions are unnecessary, as they already exist in practice. The SFC’s terms and conditions of grant include provision to ensure appropriate governance, including compliance with the principles of good governance set out in the sector code. For those reasons, I cannot support amendments 52, 53, 57, 58 or 59 in the name of Maggie Chapman.

I am, however, happy to support amendment 60, which would require the SFC to require any fundable body to which it is making payment to put in place a conflict of interest policy. It would mean that each member of a fundable body’s governing body and each senior officer would have to declare any registrable interest and withdraw from any meeting or decision-making process when there might be a conflict with that interest. It would require fundable bodies to publish, update and review a register of interests. It seems that that will further transparency and will simply give statutory effect to what is already being done in practice, and it will be useful to make what is expected clear in law.

The ONS risk also applies largely to Pam Duncan-Glancy’s amendments 56, 65, 67 and 68, so I am not able to support them.

I am, however, happy to support amendment 64, which would give Scottish ministers the power to require the SFC to require a fundable body to have a whistleblowing procedure in place. Amendment 64 requires that the whistleblowing procedure is communicated clearly to all staff, students and members of the governing body; that the fundable body sets out an elicited list of the type of matter that must be capable of being reported in confidence; and that it provides protection against detriment arising from raising any such concern. That is all highly desirable, and I thank Pam Duncan-Glancy for introducing such an important matter into the bill process and debate.

I am also happy to support amendment 66, which requires fundable bodies to inform and consult unions, students and external partners before making decisions on provision for learners, staffing levels and sustainability. Although the relevant sector codes already set out a number of principles for staff and student consultation, it is desirable to make clear the expectations for consultation and meaningful engagement by underpinning it in statute.

In light of the recent travails in the sector, I and the Government more widely have given careful consideration to the amendments in this group and I appreciate the reasons why members have lodged them. We need institutions to be accountable for their use of public money, but we also need to ensure that Government intervention does not interfere with their autonomy. Universities are private sector bodies and I hope that everyone in the Parliament would wish them to remain so. As I have said, too much Government control raises the risk that the ONS would reclassify them as public sector bodies.

We should also be cautious about putting in place onerous and punitive measures for every university and college in Scotland because of the poor governance and financial management at one outlying institution. I do, however, agree with members that we need to make sure that people have the full confidence that public funding is being used efficiently, effectively and wisely, which is why I welcomed the responses of the SFC and Universities Scotland to the Gillies report. It is important that the college and university sectors consider carefully the lessons that are to be learned from the report’s findings. The SFC has committed to enhancing the ways in which it monitors institutional governance, and I expect it to engage closely with the sectors on that work. The Government is adding powers at stage 2 that will help the SFC to do that.

Although the Gillies report found that the SFC’s financial memorandum and sector-owned “Scottish Code of Good Higher Education Governance” remain fit for purpose, we will look to make any appropriate enhancements to prevent a repeat of the situation at the University of Dundee.

I reiterate that I cannot support amendments 52, 53, 56 to 59, 62, 63, 65, 67 or 68, and I encourage members to vote against them for the reasons that I have set out.

I prefer amendment 12 to Ross Greer’s amendment 51, and I encourage members to vote against amendment 51.

I support amendments 50, 60, 64 and 66 and encourage members to vote for them. I support amendment 3 in principle, but I ask Pam Gosal not to move it to allow me to consider reframing the issue ahead of stage 3. If she does move it, I encourage members to vote against it.

I ask Miles Briggs not to press amendment 50, but if he does, I encourage members to vote against it.

I also ask Ross Greer not to move amendments 61 and 61A to 61E. If he does, I encourage members to vote against them.

My amendment 4 concerns the funding of training providers, putting beyond doubt that they are not restricted from operating in a commercially profitable way and that the SFC’s payments need not be only for the direct reimbursement of expenses.

As I emphasised earlier, private sector training providers do an important job in our system and our economy, where they are used to bring capacity and capability that are not available from colleges and universities. I am keen that the key role that they now play in our skills landscape should continue in future. It is appropriate for commercial organisations to operate a business model that generates legitimate and proportionate profit and I hope that members will support amendment 4.