SNP ministers admit 'shortcomings' in Water Industry Commission spending saga after £200-a-head meals scandal
Energy Secretary Gillian Martin said ‘a more proactive approach’ should have been applied
Scottish ministers have admitted "shortcomings" in their oversight of a water body where lavish spending was rife.
Audit Scotland released a report in late 2023 detailing £200-a-head meals, gift cards for staff and a £77,000 Harvard business course for a senior manager at the Water Industry Commission for Scotland (Wics).
Within days of the report’s release, the body’s chief executive Alan Sutherland resigned following criticism from Government and parliamentarians. But he was paid more than £85,000 in lieu of six months’ notice as a result of his contract.
In a letter to Holyrood's public audit committee, SNP Energy Secretary Gillian Martin admitted the Scottish Government's sponsorship of Wics "was not as robust as it should have been".
She said a "more pro-active approach to sponsorship scrutiny should have been applied".
Ms Martin added: “The lack of scrutiny applied by officials before providing retrospective approval for the Harvard course and the gift vouchers is also a matter of regret."
Committee convener Richard Leonard previously said there appeared to have been "a serious lack of oversight from the Scottish Government", adding: “This failure from those who are meant to be safeguarding the public purse is simply unacceptable.”
He said some of the evidence heard by MSPs about the arrangements in place at Wics “was simply extraordinary”.
A report by the committee, published in May, was critical of the Government for giving retrospective approval for the Harvard Business School course and the gift vouchers after Wics had already made the purchases.
The regulator has since made significant changes to its leadership team and policies, according to the report, but the committee pushed for “concrete evidence” of change.
Responding to the committee, Ms Martin said: “We recognise there were shortcomings in the way the Scottish Government carried out its sponsorship role and immediate actions were taken to address this.
“This included escalation beyond normal governance arrangements and the establishment of monthly assurance meetings from January 2024 attended by the chair and chief executive of Wics and the Scottish Government sponsoring director/director general.”
She said the Scottish Government’s focus going forward “is to ensure that Wics embeds a culture of compliance and understands the occasions when it must seek Scottish Government’s timely approval and we are encouraged that Wics is now flagging high-profile issues at an early stage”.
Wics interim chair Ronnie Hinds previously said it accepted the public audit committee’s report in full. “It reflects issues that we have acknowledged and have been actively addressing since December 2023,” he said.
“With direction from our board and through the commitment of our leadership team and staff, we have taken decisive action to strengthen governance, improve financial controls and embed a culture that is firmly focused on best value.
“We welcome the committee’s recognition of the steps Wics has already taken, and we are committed to continuing this momentum.
“Everyone at Wics continues to be fully focused on regaining trust and reaffirming our role as an economic regulator that upholds the highest standards, both in our regulatory approach and in our stewardship of public resources.”
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