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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 14 May 2025
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Displaying 3102 contributions

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Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 21 March 2024

Richard Leonard

Thank you. On that last point, it would be useful to have sight of the actions that you have undertaken and understand the progress that you have made on those. It would be helpful for the committee to see that.

I hear what has been said about the role of WICS and what it has done to bring in extra revenue, but the focus of the section 22 report is on conduct, behaviour, appropriate action and so on. I think that reference was made to the governance framework, which, as I understand it, was last reviewed in April 2022. Kind of ironically, that is the start of the period that is under scrutiny by Audit Scotland, which has turned up some quite concerning findings.

The Auditor General description to us of WICS’ arrangements was of

“significant weaknesses in financial management and governance”.—[Official Report, Public Audit Committee, 8 February 2024; c 2.]

He believed that those fell “far short” of what was expected. He identified issues that really stood out for him because he had never or rarely seen the like before in a public body. We will get into some of that this morning.

However, if

“Governance is the over-arching structure and strategy that provides accountability and direction, and influences the behaviours and culture within WICS”,

which is the very first sentence of WICS’ governance framework, how have we got to the situation that is reported in this section 22 report?

Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 21 March 2024

Richard Leonard

Mr Rathjen, there is doubt precisely about whether it was in force. I do not think that there is any doubt that it was on the website. I do not think that there is any doubt that a written document exists. However, there is a huge question mark over whether the standards of governance, the standards of behaviour and the systems that were in place match up to the intention that is set out in the governance document.

I will bring in other members of the committee but, before I do, I want to check something off with you. The introduction to the governance framework, which was reviewed in April 2022, says that the power of the Scottish ministers to direct the Water Industry Commission for Scotland

“is confined to matters relating to the WICS’ financial management and administration.”

Has a minister been involved in what has happened here?

Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 21 March 2024

Richard Leonard

But she was not involved, for example, in signing off the authorisation that Mr Rathjen gave to the £77,000 Harvard Business School course.

Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 21 March 2024

Richard Leonard

Okay. I invite Colin Beattie to put some questions to you.

Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 21 March 2024

Richard Leonard

Maybe the director general could answer that.

Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 21 March 2024

Richard Leonard

Okay.

Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 21 March 2024

Richard Leonard

Okay.

Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 21 March 2024

Richard Leonard

I presume that those programmes do not cost £77,000.

The final question that I have before I invite Willie Coffey to put some questions to you is about the chief operating officer. She benefited from £77,000 of public expenditure to attend the Harvard business school. I do not know how long the course lasted, but is there any condition on that expenditure that means that the chief operating officer will stay with the organisation for a certain period of time, or could she leave tomorrow?

Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 21 March 2024

Richard Leonard

Do you mean six months’ pay?

Public Audit Committee

Section 22 Report: “The 2022/23 audit of the Water Industry Commission for Scotland”

Meeting date: 21 March 2024

Richard Leonard

Wow.