Hansard

I welcome the chance to be involved in the debate. The Public Audit Committee is one of the most important committees in the Parliament and its work under the leadership of its convener, my colleague Hugh Henry, has rightly been recognised.

During session 3, the committee has considered and reported on matters such as free personal and nursing care, the financial fiasco surrounding the gathering event, police call management, and progress on planning for the delivery of the 2014 Commonwealth games. In total, it has considered 15 new reports from the Auditor General, of which 13 have been section 23 reports, which examine the economy, efficiency and effectiveness of the public sector, and two have been section 22 reports, which look at the audit of accounts of individual public bodies. As we have heard, all those issues are important and have raised more than a few concerns in Scotland. The committee concluded that several of the issues on which it recommended that action be taken have arisen in more than one report.

The issues have been grouped into three key themes, which we have heard Mr Henry and the cabinet secretary comment on. I, too, will start with transparency. With other members, I have long called for greater transparency in our dealings with quangos and other public bodies, such as in the salary and bonus payments to senior staff of Scottish Enterprise and Scottish Water and those within the senior management ranks of the national health service. As the cabinet secretary mentioned, the climate is changing. During times of financial constraint, the transparency of decisions on the expenditure of public money becomes essential as attention focuses on ensuring that value for money is achieved. That is particularly the case when it comes to delivering public services with reduced resources. Throughout the public sector, greater transparency is becoming the norm, and alarming as some of the stories may be—such as the one about £20,000 being paid to a celebrity hypnotist by Skills Development Scotland to tell unemployed teenagers how to think—the reality is that we need that transparency. It is, after all, taxpayers’ money that is being spent.

The committee has concerns that, despite the increased public scrutiny of how and where taxpayer funds are used, it has not always been able to assure itself that public funds have been spent in accordance with the “Scottish Public Finance Manual” or that the expenditure has represented effective, efficient and economical use of the money.

The ability to scrutinise and hold to account those responsible for the use of public funds is directly influenced by the availability of information. As Mr Henry said, the committee has found on occasion that its ability to hold the Scottish Government and public bodies to account has been compromised by difficulties in obtaining the relevant financial and decision-making information.

Frankly, that is not good enough. One clear example was from the agreement to extend the First ScotRail passenger rail franchise. Much of the committee’s report focused on the declaration and management of the share interests of the former director of finance at Transport Scotland during the negotiations over the franchise extension, the circumstances of his departure and the quality of the evidence given to the committee. In particular, the committee expressed concerns that the disclosure of potential conflicts of interest did not take place much earlier during the former finance director’s tenure.

The committee recommended that the Scottish Government consider whether standard processes beyond those attached to the recruitment procedures should be adopted to manage potential conflicts of interests. It also recommended that Transport Scotland ensure that minutes of meetings are robust and more accurately reflect the participation of individuals with a pecuniary interest in the business of the meeting.

Like others, I watched the Public Audit Committee meeting yesterday, at which it took evidence from Transport Scotland. I have to say that I remain far from impressed with evidence from Transport Scotland’s senior officials, which it could be said still leads to a certain lack of transparency.

In another example, on 3 March 2010, the committee published its report on the Cairngorm funicular railway, commenting on issues arising in relation to risk identification and evaluation, costs and benefits, the timing of Highlands and Islands Enterprise’s actions, and future plans for the railway. Again, it was difficult for the committee to gain information because of commercial confidentiality. It recommended that the Scottish Government consider producing guidance on how public bodies working in partnership with private organisations, such as banks, could approach the issue of financial confidentiality in a way that promotes transparency in the use of public funds.

The Public Services Reform (Scotland) Act 2010 imposes wide-ranging duties on the Scottish Government and listed public bodies to publish a wide range of financial and other information. It is important that we can identify expenditure on things such as public relations, overseas travel, hospitality and entertainment, and external consultancy. As someone who in a past life was involved in bidding for and securing contracts in the public sector, I have always been conscious of the need for accountability.

We have to come into the real world. After financial disasters such as Enron, the corporate reporting environment has changed dramatically in recent years. We cannot hide behind the public sector banner. Corporate reporting should be our byword. Government can no longer be restricted to a few press comments and financial statements if pushed; a broad range of additional information must also be disclosed.

Transparency enables Government, ministers, the public, creditors and market participants to evaluate the condition of an entity, be it a Government programme or a non-departmental public body. Transparency increases confidence and it is through work such as that of the Public Audit Committee that the Parliament can be confident that that is happening.