Committee
Public Audit Committee 29 April 2015
29 Apr 2015 · S4 · Public Audit Committee
Item of business
Section 23 Report
“Scotland’s colleges 2015”
Caroline Gardner
Watch on SPTV
We looked at that closely as part of the report, because of the concerns that the committee has aired before. The Scottish funding council’s revised guidance is clearer about what is required and links well to our guidance on managing severance. However, you are right that unless there is illegality—in most cases, there is not—limited sanctions are available. The situation is made more complicated for the reform programme because, in most cases, the colleges that made the arrangements no longer exist as legal entities—they have been merged into new organisations with new leadership that has formal accountability but was not part of the decision-making process. As you rightly said, the penalties that can be levied would penalise the new colleges and the students who rely on them for learning support. It is fair to say that the funding council recognises those difficulties. That highlights the premium that should be placed on ensuring that the guidance is absolutely clear and that oversight of that part of any merger process is done properly in real time, rather than by auditors coming along afterwards and identifying through the audit process where things have gone wrong.
In the same item of business
The Convener
Lab
We move to agenda item 3, which is evidence taking from the Auditor General for Scotland on her report, “Scotland’s colleges 2015”. I welcome Caroline Gardne...
Caroline Gardner (Auditor General for Scotland)
Thank you, convener. As the committee will know, Scotland’s colleges are the main providers of further education and they have an important role to play in h...
The Convener
Lab
Thank you. I open up the session to members. Colin Beattie will ask the first question.
Colin Beattie
SNP
Good morning, Auditor General. I am pleased by the comments in the report that, despite the magnitude of the changes, the colleges met their targets for lear...
Caroline Gardner
You are right, Mr Beattie—that is a complex issue that we have discussed with the committee previously. The reserves that colleges had built up over time cam...
Fraser McKinlay (Audit Scotland)
As the committee knows, we have been looking at arm’s-length external organisations for a good number of years now, not so much in the college sector but in ...
Colin Beattie
SNP
Are you satisfied that the measures that you are taking to audit the flow of that money will ensure that you satisfactorily capture all transactions and that...
Fraser McKinlay
Yes, I am satisfied of that. That is not to say that we can give you a cast-iron guarantee that the process will be perfect 100 per cent of the time, because...
Colin Beattie
SNP
Paragraph 7 of the report mentions that four colleges “fell short of good practice” in making severance payments. How serious was that?
Caroline Gardner
That reference takes us back to pages 38 and 39, where we discuss in more detail the severance arrangements that were made. Overall, we found that two of th...
Colin Beattie
SNP
That issue leads back to paragraph 21, which says: “The SFC also provided over £52 million between 2011-12 and 2013-14 to support college mergers. It plans ...
Caroline Gardner
I will ask my colleagues to come in with more detail in a moment. It is worth saying initially that, because one of the reform programme’s objectives was to ...
Fraser McKinlay
Do we have that information, team?
Martin McLauchlan (Audit Scotland)
We do not have in front of us the numbers of senior staff involved, but I am sure that we will be able to provide something on that. We have received some in...
Fraser McKinlay
We will come back with more detail about the principals and senior staff, Mr Beattie.
Colin Beattie
SNP
That is good, because one of the points that have come out is that the SFC does not really have powers to enforce good practice on severance payments. All th...
Caroline Gardner
We looked at that closely as part of the report, because of the concerns that the committee has aired before. The Scottish funding council’s revised guidance...
Stuart McMillan
SNP
I have a point for clarification. Is the Scottish Colleges Foundation set up in a similar manner to an ALEO? I know that Fraser McKinlay will be aware of tha...
The Convener
Lab
Can we clarify the acronym ALEO?
Fraser McKinlay
ALEOs are arm’s-length external organisations.
The Convener
Lab
You do not need to say that again—it is just for clarity.
Fraser McKinlay
I understand that the arm’s-length foundations are all charitable organisations. In that sense, the position is a bit different from that in the council and ...
Mary Scanlon
Con
My question is on the same point. As you know, the committee and particularly the previous convener asked a lot of questions about ALEOs, so I felt quite ass...
Caroline Gardner
The sums that are transferred to the ALFs can be used only in accordance with the articles—the objectives—of those foundations. I do not audit the foundation...
Mary Scanlon
Con
I understand that you can audit the flow of money between the colleges and the ALFs both ways. In your response to Colin Beattie, you said that you would alw...
Caroline Gardner
You are absolutely right. Such bodies are audited outside the usual public sector framework and there is less transparency about what comes back to the commi...
Mary Scanlon
Con
I am also concerned about measuring the expected wider benefits. I think that every parliamentarian here voted for and supported the college mergers, which w...
Caroline Gardner
There is an awful lot in that question. I will have a first bash, and colleagues might want to add some detail. You are right about the direction of Governm...
Mary Scanlon
Con
I think that the drop is of 150,000. That relates only to part-time students. I wanted an update because, in the Parliament, we have used the figure of 130,0...
Caroline Gardner
I ask colleagues whether we can lay our fingers now on the number of students broken down by age. If not, we can certainly let you have that separately. Exh...