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That is very good, and it is very helpful to hear that it is an issue that you are looking at and will be paying close attention to.

My last question is a brief one. It is about something that you flagged concern about in your report and have mentioned twice today. It is that some of the smaller NHS boards feel that the sponsorship relationship is not as good as it could be. Do you think there could be a place for a more in-depth audit of NHS sponsorship effectiveness and arrangements? I know that the issue is touched on at a very high level in the report, but could there be a bigger piece of work in which someone—perhaps even Audit Scotland—could look at the direct relationship between the Government sponsorship team and individual boards and see whether there are any specific issues that need to be addressed, because it is unclear as to what the underlying issues are behind some of those concerns?

Is the situation also an indication of the relationship between the Scottish Government’s sponsorship teams and the individual boards? How can things get to the point where the Government has to escalate a board to stage 4? According to the Government’s description, that is when the Government has identified significant weaknesses that pose a risk to things such as quality of care, patient safety, institutional reputation and financial sustainability. What is your gut feeling as to whether the Government is maintaining adequate oversight of individual boards? Surely things should not get to that point before the Government intervenes.

I look forward to reading that. Do you have a sense of whether any of the external auditors are facing challenges in carrying out their duties given that, of the 14 territorial NHS boards, eight have required brokerage loans? That is surely a reflection on their ability to manage their ingoings and outgoings financially. There are various numbers kicking around about the overspend across many boards. It is hard to pinpoint exactly what the total is, but it is in the hundreds of millions for sure although, presumably, there will be variation from board to board. How comfortable is Audit Scotland that the external auditors are able to do their job to get a proper and accurate picture of the state of the finances of boards?

I appreciate that. Thank you.

I hear what you are saying—the idea is that, if a board’s level is escalated, that is a sign of success of the oversight from the sponsorship team, but it is also a sign of weakness or failure on the part of the NHS board. If a board gets to stage 3, I presume that it is put on a plan to remediate that and bring it back to stages 2 and 1 and be fully sufficient. If a board’s level is constantly being escalated, there is clearly a failure in the system—in the board, the leadership, the management team or the oversight and governance in the board. Where do things go wrong? What requires the Government to keep escalating a board’s level up and up?

Leading on from that, what is the relationship between what would be a national plan for Government and local delivery across NHS boards? We often hear about the so-called postcode lottery in the delivery of service or access to services. There is clearly no universality to services, given that access to services depends on where you live in Scotland, as a direct result of the fact that there are 14 health boards operating differently and performing to different levels of governance. In producing your report, have you identified any conflicts between the national mission, strategies or targets, for example, and local delivery? Has there been any pushback from local NHS boards as to their ability to deliver on what are clearly Government national targets?

Thank you for that explanation. It is refreshing and nice to see a positive report that identifies good governance and operational practice. I am sure that other committee members will cover some of the areas that you raised, particularly around potential improvements to impact reporting and awareness of the bank’s activities.

It is interesting that, in your answer to me and in your opening statement, the areas of risk to the investment bank’s long-term success that you mentioned are external factors. The first area of risk relates to the bank’s mission to be a perpetual investment fund. You mentioned that the barriers to that are Treasury rules, as opposed to the bank’s own operations. The other external factor relates to the annual capital allocation of funds from the Scottish Government, which, again, is outside the bank’s control, albeit that the bank is owned by the Scottish Government. How will it be able to address those external factors?

Is there any evidence that the Scottish National Investment Bank is, in a sense, distorting the investment market by competing with private venture capitalists, private banks and other such forms of investment, or is it working well alongside—again, not competing with—other publicly funded organisations such as the British Business Bank and the National Wealth Fund, which are available UK-wide?

That sounds very positive. Maybe some private banks could learn lessons from the risk investment strategy.

I have spoken to a few organisations that have dealt with SNIB over the years. In your stakeholder engagement, did you speak to any organisations or companies that were denied investment to find out what feedback they were given? Has Audit Scotland identified any gaps in the Scottish Government’s approach to making high-risk investments?

Limited options are available to folk when the private market says no. Auditor General, you might have watched the session that we had last week with the strategic commercial assets division, in which we unearthed the fact that the division has made zero interventions, other than those that it inherited when it was set up. I have had feedback that organisations such as Business Gateway can make small grants to people, which SNIB does not do, but that there are limits to how much money is available to it. SNIB does not offer small or medium-sized amounts of capital funding to start-ups or small businesses. Is there a gap in the market that SNIB is not filling or that it could fill?

During 2024-25, £174 million was allocated—I use that example as the financial year has ended already. I presume that that money was made available, as opposed to it being moved physically into the bank’s coffers. We are trying to get our heads around whether the money has been allocated to investments. The bank cannot underspend or roll over cash, so I presume that the money is either not drawn down at all by the bank or it is sent back to the Government. Of the £174 million, a percentage of that may not have been invested. The money that has been allocated is a made-up number—you can say that £1 billion has been allocated, but if the bank cannot spend that amount of money during the financial year, it would, effectively, not have been allocated to it. That is the sort of transaction that I am trying to get my head around.