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Public Audit Committee
Meeting date: 7 January 2026
Richard Leonard
Okay, I will come back to that in a moment. Vicki Nairn, as the principal and vice-chancellor of UHI, do you accept the findings of the Audit Scotland report?
Public Audit Committee
Meeting date: 7 January 2026
Richard Leonard
That is out at midnight tonight, Auditor General, is it not?
Public Audit Committee
Meeting date: 7 January 2026
Richard Leonard
Yes. A plan and a strategy would, I presume, reflect the shift in resourcing that has been spoken about for a long time but has not necessarily been delivered.
In the interests of time, I will move on to another area. You said in your opening statement, Auditor General, that, despite more money going into the national health service and more staff being employed by it—you choose as a baseline 2019 and say that there have been additional resources of £3 billion and 20,000 additional staff members in the workforce—sustainability in the health service is not improving. Could you explain that for us?
Public Audit Committee
Meeting date: 7 January 2026
Richard Leonard
Okay, I will look a little bit more closely, not just at what happened, but at the approach that led to the section 22 report.
You might have seen that, before Christmas, we took evidence from the former chair of the board, Graham Watson, and from Iain Wishart, who was former vice-principal of operations at UHI Perth. As a follow-up to their oral evidence, they wrote to us giving further testimony of how things got to where they did. Mr Watson said in his 4 December letter to me, as the convener of this committee, that
“In the Board’s view, it would have been neither prudent nor good governance practice to agree a deficit budget when there was no certainty of how the deficit would be funded”.
As a result, no budget was agreed. Lynn Murray or Catherine Etri, does either of you want to comment on that?
09:45Public Audit Committee
Meeting date: 7 January 2026
Richard Leonard
Turning to Catherine Etri, as the accountable officer, do you agree with Tiffany Ritchie’s point that it is a fundamental part of the Scottish public finance manual that a public sector organisation sets a budget?
Public Audit Committee
Meeting date: 7 January 2026
Richard Leonard
Okay—thank you very much.
I am going to move things along now and invite Joe FitzPatrick to put some questions to you.
Public Audit Committee
Meeting date: 7 January 2026
Richard Leonard
Thank you. Again, in the evidence that we have taken, it has been recognised that this was not just a short-term issue. There was a long-term legacy of inadequate internal audit and inadequate resourcing in the finance department. As was mentioned at the committee before Christmas, there were five directors of finance in a very short period of time, which suggests that something was not quite right—I see Mike Baxter nodding his head.
I will move us on, because Colin Beattie has some questions to put. Colin, over to you.
Public Audit Committee
Meeting date: 7 January 2026
Richard Leonard
I am a little confused because I would have thought that an observer from the UHI’s court going along to meetings of the college board of management would have had some kind of role in communicating and challenging some of the decisions that were being made, particularly given that we have ended up with you appearing before the Public Audit Committee of the Scottish Parliament and there having been a section 22 report by Audit Scotland. We have heard from Tiffany Ritchie that this is almost an unprecedented situation. I suppose the question is why that was allowed to happen.
I think that Mike Baxter wants to come in, so I will bring him in and then I will ask Graham Simpson to put his questions to the witnesses.
Public Audit Committee
Meeting date: 7 January 2026
Richard Leonard
Thank you very much, and a belated happy new year to you, too.
I will start by looking at progress through the lens of your annual reports, Auditor General. To some extent that is captured in appendix 5 of the report that the committee has before it today, but when I went back to look at the equivalent report from 2024, I saw that you made recommendations that certain things should happen, and I want to check the extent to which progress on those fronts has been made.
One of your top recommendations was that there ought to be a capital investment and asset management strategy. Is there one? You talked about the need for a revised medium-term financial framework for health and social care. Has there been one? You also talked about the importance of lessons being learned from the negotiations following the contractual end of the private finance initiative/public-private partnership contracts, which have been a long-standing feature of the NHS. Could you update the committee on the progress on that front?
Public Audit Committee
Meeting date: 7 January 2026
Richard Leonard
The SFC has been mentioned. Jacqui Brasted, what is your view of what happened with the failure to set a budget? I know that you said in your submission that, because of the nature of the regional strategic board, you did not have direct access into the college.