“The 2012/13 audit of North Glasgow College”
Item 4 is a response from the Scottish Further and Higher Education Funding Council on the AGS report, “The 2012/13 audit of North Glasgow College”. Members will recall that we had a number of submissions on the AGS report and that Audit Scotland will be reporting in April this year on Scotland’s colleges. I would welcome views from colleagues in connection with the submission.
To be honest, I thought that the response from the Scottish funding council does not help us very much. It has endorsed the actions that the new college has taken, which is fine, but it has not applied for any clawback in relation to the severance payments, because it would have to claw it back from the new body and the money has already been handed out.
It is good to know that the SFC now has procedures in place and all the rest of it, but it is still quite outrageous. I do not know where we can take the matter, but the way it has been handled is certainly pretty unsatisfactory.
There are a lot of questions in the various reports that we have received. At our meeting of 19 November, we received the review that was carried out by the college itself, the “Governance of senior management severance” report carried out by Scott-Moncrieff, which was completely unsatisfactory. It said:
“The Remuneration Committee had not met for a number of years... The Committee received inadequate management support... The Committee was unaware of the SFC guidance on severance arrangements that set out the requirements for documentation, decision making and record keeping”
and that
“The College had no severance policy”.
Decisions were taken to retain members of staff on six months’ gardening leave—the two most senior leaders in the college at that time—and the whole thing was totally unsatisfactory, but I do not know where we take it from here. We are not an investigative committee, but we might think that there was some possibility of an independent body investigating in more depth what happened, how it happened, why it happened and the appropriateness of what was done. I leave that comment out there because I honestly do not know where we should go.
I tend with agree with Colin Beattie. In paragraph 4 of the letter from the funding council, which sets out the actions that the college can take in response, the first action seems to be to establish that it did fail to follow the guidance, which does not strike me as much of an action. The third action, as Colin said, is to apply for clawback but it seems to suggest that that will not happen because it would affect the funding available for students at the college. Presumably, that is going to be the case into the future with new colleges too, so it does not seem like much of a sanction.
As to the second action, I have to just confess that I have absolutely no idea what it means. It states that
“depending on the response to the first point, we can use our statutory power to address the Board to set out its responsibility for ensuring compliance with guidance”.
I do not know what that means. I can understand what the third point means, and I can understand the reasons why the funding council would not necessarily want to use clawback if that was the only avenue available, but I think that it is a very unsatisfactory situation and I am not sure as to what the next step would be.
I am with Colin Beattie on this one. I think that I am right in saying that we are talking about two individuals who awarded themselves around £750,000 of public money that would have gone far in providing a public service. I know that the SFC has now come forward with guidance about adhering to the Scottish public finance manual, but I find it hard to believe that there was no guidance in place for colleges given how long they have been incorporated—since 1994, I think. It seems to have been everyone’s fault but the college’s. There was no guidance; there were meetings without minutes.
Despite the fact that the body that we are looking at has now changed to a merged college, I still think that there are individuals who have somehow to be held responsible. Can we ask for legal advice? Is it something that the Scottish Public Services Ombudsman could look at clawing back? As the Public Audit Committee of the Parliament, if we do not do anything, that sends out a signal that people can have private meetings with no audit trail and forget about the guidelines, and that institutions can do such things and then change their name, merge and get away with it.
I do not feel comfortable about letting the matter end here purely because the Scottish funding council has introduced guidance on the public finance manual. I am with Colin Beattie on this one. It is unacceptable and I think that somehow we have to look at clawback if it is possible and get legal advice if that is appropriate.
If we were to ask the man or woman in the street how they felt about it, I think that the word “criminal” would spring to their mind.
Exactly.
I am conscious, as members of Parliament always are, that “criminal” has a very specific meaning and a legal meaning, but in its non-legal meaning I think that that is how people would describe the situation.
Therefore, I am wondering whether we could get legal advice, as Mary Scanlon suggests, on whether what has happened is deceit, fraud or something else—it is certainly an abuse of position—and get appropriate advice on whether it is criminal. If the answer is that it is not, we might just ask ourselves whether it should be. That is clearly for the future, but I think it is important to signal—
Let us be clear that we are talking about the Auditor General’s report and that there has not been any suggestion in the Auditor General’s report other than on issues concerning the procedures that were followed. I need to protect the committee here. Legal advice and anything like that is for another discussion, but the focus of this item of business is on the Auditor General’s report, so colleagues should ensure that they refer their comments to that report, which refers to the procedures that were followed.
I am sorry, convener, but the Auditor General’s report said that there was no audit trail. It was all done behind closed doors with no audit trail.
Nigel Don is talking about what people out there would think about procedures not being followed. That is the whole point. The procedures were not followed, and one of the things that the college authorities attempted to do was to blame the situation on the Scottish funding council by saying that the SFC had not laid down procedures.
We have a letter today saying that the Scottish funding council has introduced guidance on the public finance manual. I find it very difficult to think that there were no procedures in place. The fact is that the people who got away with so much money did not follow any procedures. There was no audit trail, there were no minutes and there was a huge amount of gardening leave. They may say that they were unaware of the requirements, but they were very well aware of the money that they were getting. I think that it is unacceptable.
11:15
Let us clarify the options that are available to the committee. Members have made some pretty robust comments about their concerns in relation to the response that we have received from the funding council.
One of the options available to us is to highlight the issues to the Education and Culture Committee because, as some colleagues have pointed out, it is not our role as the Public Audit Committee to become an investigative committee. That is recognised. One option is therefore to present the matter to the Education and Culture Committee.
We could also highlight our concerns to the Cabinet Secretary for Education and Lifelong Learning, who has overall responsibility for the new colleges that have been merged. We could highlight some of the concerns that have been raised today and the concerns that have been raised in the Auditor General’s report.
Those are the options that are available to the committee to take the matter forward. Does anybody have any views on that?
Given the limited options that are available to us—it is frustrating that there is not more that we can initiate—I think that we should tell the cabinet secretary, as it is a serious issue, and I think that we should refer the matter to Education and Culture Committee as well.
This is part of the fallout of the new colleges, and I honestly do not think we can walk past it. We have to highlight it in some way to people who can take action. We will have discharged our duty as the Public Audit Committee by ensuring that the right people get the report in front of them.
I think that we should refer the issue to the cabinet secretary. I would still like a bit of legal advice. Both Colin Beattie and I are on the Education and Culture Committee; we both feel fairly strongly about the matter and we would be happy to take it forward there. I am not sure how much we can achieve, but it would be helpful to highlight it elsewhere.
We have that opportunity, and perhaps we can discuss at a future meeting the contents of the letter that is sent to the cabinet secretary. Is that agreed?
Members indicated agreement.
As previously agreed, we move into private session.
11:16 Meeting continued in private until 12:01.Previous
Section 23 Reports