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Meeting of the Parliament 03 March 2011

03 Mar 2011 · S3 · Meeting of the Parliament

Item of business

“Session 3 reports of the Public Audit Committee—key themes”

Kelly, James Lab Glasgow Rutherglen Watch on SPTV

I welcome the opportunity to take part in the debate and tender my apologies, because I will have to leave before the end to attend an urgent meeting on a constituency matter.

Like other members, I congratulate the Public Audit Committee’s members and clerks on the work that they do. I pay particular tribute to Hugh Henry, the committee’s convener. The committee’s work was recognised at the Scottish politician of the year awards; the award that it received was richly deserved. The committee does important work.

I disagree completely with the tenor of Anne McLaughlin’s remarks. The committee has not limited itself to scrutinising aspects of the Government’s work over the past four years; plenty of the reports that come before it make comparisons with what happened in previous years. The cabinet secretary referred to capital projects. The committee was complimentary about the improvements that have been made to monitor and measure such projects.

The key themes are governance, transparency and accountability, and they are brought out in a number of the committee’s reports. The First ScotRail franchise report highlighted serious concerns about the lack of a documented business case on whether the franchise should be extended. It was a case of government by PowerPoint. The information may have been available in different files and sources. However, when in my previous life as an internal auditor I asked an organisation to provide a business case, I expected to see it in a file, properly documented. We did not get that in this case.

Astonishingly, it transpired that Guy Houston, the previous finance director of Transport Scotland, held shares in FirstGroup at the time that discussions were taking place about whether to extend the franchise. Not only was that quite staggering, but it was difficult for the committee to establish whether Mr Houston was involved in any of the discussions about extending the franchise. Initially, the committee was told that he was not, but it transpired that he attended meetings relating to the issue. To me, that showed that there were some difficulties with the civil servant. Hugh Henry was right to take a robust approach with the permanent secretary. It is important that, when a civil servant appears before a parliamentary committee that is scrutinising aspects of work, they realise that they must be open and transparent and must take the committee seriously. It is unacceptable for civil servants to be, at best, inconsistent in some of their explanations.

The examination of the First ScotRail franchise report raised a number of key issues, some of which fed into the committee’s work on The Gathering 2009 Ltd, which Jamie McGrigor has highlighted. The Government gave a loan of £180,000 to the company. The lack of robust checks and due diligence around The Gathering 2009 Ltd raised concerns about what was involved in passing over the loan. Those were compounded by the fact that the Government did not join the steering committee and did not pass on to it information that the loan had been made. In fact, the First Minister admitted to the committee that that approach was not correct. In addition, the steering committee lacked accurate and up-to-date financial information to examine, which led to some of the problems. The people who suffered at the end of the day were the creditors, because they were left in the dark about what discussions were taking place.

On capital projects, as I said earlier, I recognise that some improvements have been made in measuring up-to-date information, which is important, as Nicol Stephen said. However, the revenue consequences of capital spend are also important. A recent Audit Scotland report highlighted that in forecasting future spend there are difficulties in establishing future revenue because of factors such as depreciation, so that issue must be looked at.

This debate has been worth while. There are lessons to be learned around accountability and transparency. I compliment the Public Audit Committee on its effective use of parliamentary resources.

10:45

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Meeting of the Parliament 03 March 2011

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