Audit Committee, 17 Jun 2003

Meeting date: Tuesday, June 17, 2003

Official Report 185KB pdf

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Work Programme (Audit Scotland)

We will return to our discussion of Audit Scotland's forward work programme. Does anyone have any questions?

It was announced last week that Audit Scotland would play some sort of role in the investigation into the Holyrood project. How will that fit into your forward work programme? What might the role of the Audit Committee be?

Members will recall that I produced a major report on this subject in September 2000, which led to three or four meetings of the Audit Committee at which extensive evidence was taken. That means that there is a body of evidence and a report from the Audit Committee that extensively covers the early events surrounding the project. As I intimated a few moments ago, I prepared a second report in December 2002 that examined some contract management issues in the period up to, roughly speaking, last summer.

I understand that the First Minister and the Presiding Officer intend to have Lord Fraser of Carmyllie institute an inquiry, which I will be invited to assist in. It is difficult for me to say more at this stage as events are unfolding and I have not yet had the opportunity to discuss the form of the inquiry with the Executive and the Parliament. However, I can say that it would be my intention to undertake a full examination of the management of the Holyrood project towards the end of the life of the project, under my powers. That report would be laid in the Parliament in due course and would be available for the Parliament to dispose of as it wished.

I take it that your original report contains full information on what happened from 1997 to 1999. Is that correct?

The committee will be aware that I assumed powers following devolution, in the spring of 2000. Therefore, the extent to which my report goes into detail regarding matters preceding devolution is rather limited. Having said that, I point out that the Scottish Executive co-operated in giving me access to information and that there are sections of my report that describe some of the early events around the forming of the contract structure. That matter was addressed quite fully by the Audit Committee when it took evidence.

I am not empowered to consider any matters of a policy nature and, therefore, when I undertook that examination in 2000, I explicitly did not consider matters such as the decision to create a new building or the choice of site.

As the Auditor General said, following the publication of his report in 2000, there was considerable discussion in the committee and we took a great deal of evidence on the matter. I would be interested to learn what actions have since been taken on the basis of the findings of the Audit Committee and the Auditor General. I do not know whether it would be appropriate for the Audit Committee to examine that while the independent inquiry is on-going, however.

There should be consultation with the public, public authorities and the committee on the Auditor General's work programme, but there should also be discussions with the Scottish Commission for Public Audit, as the commission must be assured that there is sufficient money in the budget for work to be undertaken. I make that plug so that new committee members are aware that there is a body that, in effect, oversees Audit Scotland's work.

Auditor General, would you care to say something about resources and lessons that might be learned from previous reports?

I shall resist the temptation to delve into Audit Scotland's resource needs and simply say that we do our best to deliver the maximum programme within the resources that are allowed. Such matters will be explored with the commission over the summer. It goes without saying that there will be resource implications if we are invited to undertake major work in addition to what is in the programme.

Will you expand on the brief that you have been given with regard to Lord Fraser of Carmyllie's independent inquiry? I assume that you have not been invited to give evidence as a witness. In what capacity have you been asked to assist Lord Fraser with his inquiry? Will you be a special adviser? If not, what will be your relationship with that investigation? Have you been asked to assist as an individual or has Audit Scotland been asked to assist? What resource implications are there? If Audit Scotland has been asked to assist, what are the implications in respect of an independent inquiry? Perhaps a brief has not been given, but I am intrigued by interactions between you, your office and Lord Fraser.

I cannot give a full answer to your questions, as there has not yet been a formal discussion with the Executive or the Presiding Officer about the matter. Before the First Minister's announcement last week that he intended to invite Lord Fraser to institute an inquiry, I was informally approached and asked whether I and colleagues in Audit Scotland would assist. I said that we would certainly do so to the best of our abilities.

I mentioned to Mr Lyon that a large body of evidence already exists. At the very least, it might be helpful to Lord Fraser if I were to assist him in gaining a good understanding of that evidence in order to avoid wasted effort in trawling over ground that has been well explored. My powers and duties to audit, examine and report to the Parliament are clearly laid out in statute. There would have to be an understanding about the procedures that would be used to allow me to contribute beyond simply assisting Lord Fraser with evidence that is already in the public domain. As I said, I intend to make a report to the Parliament in due course on the project as a whole, but I will be sensitive to and accommodate Lord Fraser's inquiry intentions as far as possible in making a report to the Parliament.

A document has been laid before the Parliament that looks into the corporate body's accounts and, at the very least, we should consider that document at some stage. Obviously, we cannot fit that in before the recess, but interesting issues will arise out of it that will be worth exploring.

Are you saying that to me or to the Auditor General?

To you.

I suggest that that matter should be an agenda item for consideration at our away day, when we will discuss our work programme—we can then decide on the merits of taking the matter further. The point is well made and we need to consider it.

I would like three points to be clarified, although some of what I will say has been addressed. On the model that is being adopted for the independent inquiry into the Holyrood project, will the Auditor General say whether there are any precedents for the relationship that has been mentioned between an independent expert group and his office? Secondly, it is important to be clear for the Official Report that it is within the committee's power to consider any report that is laid before the Parliament, wherever it comes from, either on the issue in question or on any other issue. Thirdly, given the activity and interest around the issue, when and how should the committee become involved in the process? I think that the convener has answered that question.

On your first question, I can think of no precedent in the Parliament's short life for such an arrangement. On your second question, it is absolutely true that the Audit Committee may consider any report that I lay in the Parliament, including any forthcoming report that I might make on the Holyrood project. Thirdly, on timing, my considered view is that it would be better to wait until the project is nearing completion before I proceed with a major examination and produce a major report on the whole project. At this point, it is difficult to comment on time scales.

That is nothwithstanding the difficulty of knowing when the project will finish.

Given that there is no precedent for the relationship in question, do you foresee any possible conflict of interest? To some extent, you are a creature of statute and have set responsibilities. There will be an independent and welcome inquiry. Given your remit and the investigations that you will conduct in whatever time scale, do you see any difficulties with wherever Lord Fraser may be going? If so, should we seek clarification from the First Minister or the Presiding Officer about whether there should be a separation of powers and perhaps remits and roles?

On the basis of the informal understanding that I have, I see no conflict of interest. We will require detailed discussions on practical matters relating to how Lord Fraser envisages his inquiry taking place, but it would be perfectly possible to envisage his inquiry and my examination using formal powers complementing each other and enabling the Parliament and the public to get a picture of everything that has happened with the project.

I think that we have covered all the points that we need to cover under this agenda item. I should mention that another aspect of the committee's work in its relationship with Audit Scotland is consideration of Scottish Executive responses to committee reports. In the not-too-distant future, there will be a report on dealing with offending by young people, for which we would expect an Executive response. I will put that matter on the agenda for the away day so that we can consider whether we need to address that matter as an item of business along with Audit Scotland's work programme.

We have focused our comments on Audit Scotland's work programme and specifically on the important topical issue of the Holyrood project. I am sure that the committee will wish to consider and discuss further a wide range of other issues with the Auditor General. What mechanisms are available for us to have input, either individually or collectively, in the process of shaping the programme? I appreciate that the decision lies ultimately with the Auditor General, but what opportunities will there be for us to shape the programme in the weeks and months to come?

We have the opportunity to raise ad hoc items that we feel might be investigated or subject to audit and which we can put to the Auditor General. Given that the Auditor General must protect his independence, we can only put a view. In a sense, it is probably best that we do so sparingly.

We welcome at any time members' thoughts about issues that should be included in the programme. As Caroline Gardner said, it is usually a case of deciding what not to do rather than what to do. The convener said that the committee might consider having an away day, which would be an opportunity to explore generally the longer-term thinking about what might be in the programme. We will certainly have the opportunity between September and the end of the year to consider the practicalities and implications of taking on some of the topics that are raised. It would be enormously helpful for us to have an indication of that thinking. As Caroline Gardner said, we will come back for a full consultation with the committee early next year about which topics should be included.

There might be issues around the role of the Audit Committee vis-à-vis other committees of the Parliament, particularly the subject committees, which are increasingly interested in our work. I would welcome a situation where the Audit Committee acts as a clearing house for opinion on certain matters, in view of the clear position that it has under the standing orders. There might be a useful discussion in the early part of next year not only about the priorities that emerge from our discussions with the committee, but in relation to views expressed by other committees about what we might consider.

I have a small point about processes. The Auditor General engages with the committee through the formal mechanism of our hearing evidence on individual reports. Are committee members allowed to speak to the Auditor General either individually or collectively to receive briefings on issues that are contained in reports once they are laid before Parliament in order to seek clarification? Can we request such briefing sessions from the Auditor General and his officials? Is that part of the relationship that we have?

We try to ensure that, as far as possible, reports that are laid before the Parliament appear, through the good offices of the clerk and the convener, on an early committee agenda. That allows us to brief all members of the committee on the same basis about what is in the report. It also allows the committee to consider formally how it wishes to respond. There might be occasions, particularly during the recess, when reports are published but will not be considered by the committee for some considerable time. In such cases, I recognise the need for members to seek further information or clarification from us. I certainly encourage committee members and indeed any MSP to contact the office if they would like to do so. If members have concerns, I encourage them to telephone us or drop us an e-mail or a note and we will do our best to respond. We endeavour to ensure that there is a short gap between a report's coming out and the opportunity for the committee to consider its contents formally.

I note what the Auditor General said about the committee's acting as a clearing house. There is no doubt that there is a concern that more work could be done in the Parliament on scrutiny and on holding the Executive or the process to account. We might wish to discuss at our away day the belief that more such work needs to be done. There is no doubt that that would have resource implications for Audit Scotland as well as implications for the Audit Committee's role. We will take the matter up another day.