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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 14 September 2025
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Displaying 1631 contributions

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Public Audit Committee [Draft]

“The 2022/23 audit of Lews Castle College”

Meeting date: 3 September 2025

Jamie Greene

What would your advice be to those colleges that are interested in this committee session and might be watching and thinking about their own accounting practices and the repercussions of this case?

Public Audit Committee [Draft]

“The 2022/23 audit of Lews Castle College”

Meeting date: 3 September 2025

Jamie Greene

Right. I guess that I am playing devil’s advocate here. You can perhaps see the rationale for the college saying that, as its maximum liability in the venture is £1, it does not want a figure of £4.7 million to be in any way perceived as a potential liability, should the JV fall, for example.

Public Audit Committee [Draft]

“The 2022/23 audit of Lews Castle College”

Meeting date: 3 September 2025

Jamie Greene

Auditor General, in paragraph 16 of your report, you refer to “Two further material misstatements” regarding the 2022-23 accounts, which were subsequently corrected. Do you know what those “misstatements” were and why they were in the accounts in the first place?

Public Audit Committee [Draft]

“The 2022/23 audit of Lews Castle College”

Meeting date: 3 September 2025

Jamie Greene

Indeed, and that leads me to my final question. It might seem as if we are making a lot of fuss over a minor technical point about accounting and auditing, but the fact that you have produced a statutory report is itself unusual, which is why we are dedicating a whole hour of our committee meeting to it. Clearly, there are wider implications for other parts of the further and higher education sector where there are also joint ventures. What we are discussing here is a charitable venture, but many are not; I am aware of a number of colleges that are in financial joint ventures or which have created third-party entities with private companies for, say, apprenticeships, investment in new buildings and assets and so on. There are wider implications particularly for the college sector, which, as you acknowledged earlier, is already under incredible financial stress. Are you aware of any other areas where this could come up as an issue? Might it change the auditing practices relating to joint ventures involving colleges or other public bodies?

Public Audit Committee [Draft]

“The 2022/23 audit of Lews Castle College”

Meeting date: 3 September 2025

Jamie Greene

For the record, I wish the college the very best in its joint venture. It clearly has some admirable aims and ambitions.

Public Audit Committee [Draft]

“The 2022/23 audit of Lews Castle College”

Meeting date: 3 September 2025

Jamie Greene

We could probably end this evidence session now, as we have covered quite a lot of ground, but it has thrown up some interesting philosophical arguments about how public bodies account, and that is what I want to dig into.

When reading the correspondence that we received from the college, I was quite intrigued by the rationale for its decision. I do not really want to talk about that particular example; my interest is more in the rationale that the management used to come to that decision.

Mr Howse, can you comment on the three reasons given for the £1 valuation? It is not that the joint venture is worth £1, because clearly that is not the case—it has been valued at £9.4 million, for a range of reasons. However, the college make three specific points regarding why it came to that conclusion—we can perhaps ask it about that in future.

10:15  

I am intrigued by a few things. The first point is that the assets in the joint venture are restricted in nature, which could be interpreted in different ways. The second is that there is no expectation of future economic return. That is, again, a fortune-telling look into the potential value of a joint venture and whether it will make any profit for the partners in it. The third is that the college makes a financial contribution to support the operations—in other words, it requires annual investment to maintain the joint venture.

Are those three points of rationale for coming to a £1 valuation normal factors that you would take into account in considering impairment? They seem quite rational and logical to me.

Public Audit Committee [Draft]

“The 2022/23 audit of Lews Castle College”

Meeting date: 3 September 2025

Jamie Greene

I will ask my main questions later, but this one relates to what Mr MacPherson just said.

I assume that you engaged with the college or the now merged entity ahead of producing the section 22 report. Why is none of the content of the letter that we received yesterday in the report? Is it because the information was not provided to you or because it was provided but you chose not to include it?

Public Audit Committee [Draft]

“The 2022/23 audit of Lews Castle College”

Meeting date: 3 September 2025

Jamie Greene

It feels as though the letter is the body’s right to reply to what you have said. Is that your impression?

Public Audit Committee [Draft]

“The 2022/23 audit of Lews Castle College”

Meeting date: 3 September 2025

Jamie Greene

That is helpful. Thank you.

Public Audit Committee [Draft]

“The 2022/23 audit of Lews Castle College”

Meeting date: 3 September 2025

Jamie Greene

Shortly after the accounts were produced, the college merged with a bigger entity. What material difference would it have made had the £4.7 million been recognised rather than the £1? Would it have had any effect on its being able to merge or on the negotiations on the merger, or would such a consideration have been immaterial?