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Chamber and committees

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 5 May 2021
  6. Current session: 12 May 2021 to 7 July 2025
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Displaying 3287 contributions

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Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 19 February 2025

Richard Leonard

Thank you very much indeed, director general.

Before we get into the nuts and bolts of the section 22 report, there is a matter in the public domain this week that has attracted quite a bit of attention in Parliament, about Scottish Water senior management bonus payments. I think that it was highlighted that three people were in receipt of £330,000 last year in bonus payments. That constituted a 35.9 per cent rise in one year.

The Scottish public finance manual charges you, Mr Brannen, with

“regularity, propriety and value for money”.

WICS’s terms of reference say that your job is

“to promote the interests of Scottish Water customers to ensure long-term value and excellent levels of service”.

How do you reconcile the revelations about bonus payments with those terms of reference? I will start with you, Mr Brannen.

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 19 February 2025

Richard Leonard

You used the expression “ministers”—plural—a couple of times, director general. Who signed off that framework for bonuses to be paid?

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 19 February 2025

Richard Leonard

Okay. Mr Simpson wants to come in.

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 19 February 2025

Richard Leonard

I am going to move things on. The deputy convener has some questions in that vein, so I hand over to Jamie Greene to put questions to you.

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 19 February 2025

Richard Leonard

Thanks for that.

Let me disclose that I used to deal with Scottish Water as a trade union organiser. Two out of the three people who are highlighted as receiving those whacking great bonuses are people who I dealt with 15 or 20 years ago.

To recap, Mr Brannen, you are going to supply us with the name of the ministers who are responsible for signing off the framework for the bonuses and you are going to send us details on the bonus scheme and how it operates. Could you also give us some information about the current manager reward review, which is under way in Scottish Water?

11:15  

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 19 February 2025

Richard Leonard

Thank you very much, and thanks for your forbearance with that.

I want to move on to the section 22 report, which we have before us. I begin by asking Mr Brannen and Mr Hinds, in the first instance, whether you accept the findings and recommendations of the section 22 report.

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 19 February 2025

Richard Leonard

Thanks for that. Mr Hinds, do you want to come back in?

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 19 February 2025

Richard Leonard

I will ask a particular question about one of the things that is identified in the section 22 report. It is highly unusual and is something that we have not seen before. It is highlighted by the Auditor General that the limit on the amount of public money that can be spent on meals, subsistence and so on was removed in January 2023. I will turn to the Scottish Government first. When did you become aware of that? If you did not know about it, why did you not know about it?

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 19 February 2025

Richard Leonard

I am very conscious of the time but we have two outstanding questions that we want to put to you before we finish—one of them is from the deputy convener. Before we get to that, following on from what we have just been talking about, we were told by the former CEO that there had been discussions—I think that we have alluded to this in previous evidence sessions—about the tension between the regulatory role and the consultancy role and whether there should be a distinct and separate operation. He mentioned that a name for a separate organisation to cover the consultancy work was discussed at the board on numerous occasions and I think that that name was registered but never activated. Can any of you shed any light on why that never emerged as the way to separate out some of the difficult issues that we have discussed this morning and in previous sessions?

Public Audit Committee

Section 22 Report: “The 2023/24 audit of the Water Industry Commission for Scotland”

Meeting date: 19 February 2025

Richard Leonard

Right. That is slightly at odds with what Mr Brannen said earlier, which is that, in the end, it all must be compliant with the Scottish public finance manual and good governance arrangements, value for money and so on.