Committee
Audit Committee, 30 Apr 2008
30 Apr 2008 · S3 · Audit Committee
Item of business
“Financial overview of Scotland's colleges 2006/07”
I want to ask about the issue of governance, which you touched on, and about leadership. From my local experience, I am struck by how, in the wider Renfrewshire area, leadership is critical to the health and wellbeing of further education colleges. In the past, there were significant concerns about the financial performance of Reid Kerr College in Paisley and about the quality of the product that the college was offering. Then a new principal was brought in. Under Joe Mooney, the college has been transformed. There is a vitality about it. It is outward looking, positive, well run and well managed. There is a real buzz about the place. Just down the road in Greenock is James Watt College, which had been regarded traditionally as a dynamic, outward-looking college and a trendsetter. In the past few years, it has almost collapsed. I am struck by the critical role of the principal in both those cases. That must surely apply more widely. A good principal has influence in ensuring that a college is well run and well managed, and that it sticks to its accounts properly and improves the quality of the service that it provides to students. What can we take from the report about the influence of the principal?The second issue affecting governance and leadership is college boards, which Barbara Hurst also mentioned. I get a feeling—I may be wrong, as this may be a subjective view—that boards are often merely a fig-leaf to allow the principal to do what the principal wants to do. Are boards perhaps incapable of holding to account and challenging the principal to ensure that the college is properly governed?Where boards have such weaknesses, what is the solution? Do we simply need to ensure, as has been suggested, that boards have sufficient numbers of people with recent financial experience? Do we just need board members who are diligent enough and able enough to look at the detail and to challenge? Do questions need to be asked about the methods by which board members are appointed? Frankly, to an outsider, it looks as though the board is appointed by the principal and there is no objectivity or accountability in the wider process. That is a worry, given the substantial amounts of public resources that are being invested in the sector.I would be interested to hear the Auditor General's thoughts on those issues.
In the same item of business
The Convener:
Lab
The second item on the agenda is the Auditor General for Scotland's report "Financial overview of Scotland's colleges 2006/07". The issue has significance th...
Mr Robert Black (Auditor General for Scotland):
Thank you, convener. I will be assisted in this briefing by Barbara Hurst, who will be master—I am not sure if one says mistress these days; I will say maste...
Barbara Hurst (Audit Scotland):
Set against that relatively positive picture of college finances, four colleges—Edinburgh's Telford College, Elmwood College, James Watt College and North Gl...
The Convener:
Lab
I want to ask about the issue of governance, which you touched on, and about leadership. From my local experience, I am struck by how, in the wider Renfrewsh...
Mr Black:
I will attempt to reply to the convener's questions and thoughts on those extremely important general issues before inviting Barbara Hurst to respond.I absol...
Jim Hume (South of Scotland) (LD):
LD
Overall, the position is improving, which page 4 of the report says has been achieved "by increases in funding". However, in paragraph 95 on page 20 concern ...
Barbara Hurst:
It is still too soon to say. In our report, we say that there is a risk of colleges being affected, but we do not know what will happen. As a result of the r...
George Foulkes (Lothians) (Lab):
Lab
This is an excellent report that shows the value of the whole process. The colleges' financial performance has improved under pressure from the committee and...
Mr Black:
I acknowledge Lord Foulkes's concerns about the performance of the governance function. It is not really possible for us to give members a strong evidence ba...
The Convener:
Lab
George Foulkes and I have raised issues of governance with you. I described boards as a fig-leaf for many principals. They appoint their board, so they can a...
Murdo Fraser (Mid Scotland and Fife) (Con):
Con
I want to ask about the points that are mentioned in paragraphs 23 to 27 of the report. I am rather concerned to see from the report—if I am reading it corre...
Mr Black:
The approach is not terribly satisfactory. Our difficulty is that the accounting standards allow different treatments, although we have encouraged the sector...
Barbara Hurst:
Mark MacPherson could give us an update and explain in a bit more detail.
Mark MacPherson (Audit Scotland):
Members will appreciate that accounting treatment is quite a technical issue. We appoint auditors to provide an independent opinion, so it is perfectly reaso...
Murdo Fraser:
Con
When is the situation likely to be resolved?
Mark MacPherson:
We cannot say with certainty when it will be resolved. There are still issues to be discussed and opinions to be resolved by different people. However, we ca...
Murdo Fraser:
Con
Yes. Thank you.
The Convener:
Lab
What would be required to ensure consistency? You mentioned that a degree of flexibility is open to people, but it seems rather absurd that different people ...
Mr Black:
We have suggested to the funding council that it would be helpful if it introduced a clear sector-wide policy to which the auditors could respond, but that i...
Stuart McMillan (West of Scotland) (SNP):
SNP
Barbara Hurst mentioned two reports—on James Watt College and Kilmarnock College—that have been laid before the Parliament. What are they about? Are they sec...
Barbara Hurst:
They are. They have been laid with the accounts of the two colleges and highlight for the committee issues that arose from the accounts. It is unfortunate th...
Stuart McMillan:
SNP
Do they relate to 2006-07 or 2007-08?
Barbara Hurst:
They relate to the 2006-07 accounts. We mentioned them in the report. They will come to the committee.
Stuart McMillan:
SNP
I was not sure whether they were in addition to what is mentioned in the report.
Barbara Hurst:
No. There is a more formal process to ensure that we bring matters to your attention.
Stuart McMillan:
SNP
I agree with what the convener said about James Watt College. Around a year and a half ago, I spoke at a rally in Greenock in support of the lecturers, staff...
Mark MacPherson:
I do not think that we can add anything to what is described in the report; the position has not changed. It is up to the college to move on and work accordi...
Sandra White (Glasgow) (SNP):
SNP
Overall, the report is very good. The deficit has moved to a surplus, which is excellent.I have a couple of questions, one of which follows on from the quest...
Mr Black:
One benefit of amalgamation is that the new body will have the critical mass to ensure that it has strong finance and leadership skills and stronger boards. ...
Mark MacPherson:
Our understanding is that the option is a shared campus and not an amalgamation of the colleges. What happens when the colleges share a campus is a matter fo...