Hansard

I thank Graham Simpson, who has been a very active member of this inquiry by the committee. I agree with him that there are still many unanswered questions.

We revealed, over the course of the inquiry, both a careless neglect and a wilful indifference toward policies and procedures for things like the procurement of services like legal advice, recruitment searches and the booking of business-class air travel. And of course, this was all from the body that was created in statute by this Parliament to

“promote the interests of Scottish Water customers to ensure long-term value and excellent levels of service.”

You could not make it up.

So this is, rightly, a matter of serious concern for this Parliament, but the fundamental question which has to be addressed today, which must also be a matter of serious concern to this Parliament and to this Government, is not just that these things happened; it is that these things were allowed to happen. Where was the challenge to these behaviours by the board of the Water Industry Commission for Scotland? Where was the challenge from the Scottish Government’s sponsorship team? And how on earth was it that WICS drifted into a culture of spending public money in ways that were directly and blatantly in breach of the rules of the Scottish public finance manual? I know that the Cabinet Secretary for Climate Action and Energy accepts this, and the new leadership team at WICS accepts it, too.

But let me turn to some of the most egregious examples identified by the audits. It has been widely reported that a senior member of staff attended a training course at the Harvard Business School in Boston, at a total cost of over £77,000. What has been less widely reported is that there was no competitive tendering exercise; that there was no business case made and no value-for-money case made; that there was no lock-in period for that member of staff involved, so they could just have left their job the day after the course was finished; and that, even though it breached the spending threshold of £20,000, there was no Scottish Government approval sought, either. In fact, when it was applied for retrospectively, we were told by a senior civil servant that

“there was no material benefit ... in challenging”—[Official Report, Public Audit Committee, 21 March 2024; c 13.]

the expenditure, as the money had already been spent.

The Government has since backtracked on this, but this was not an isolated incident. Freedom of information requests later revealed that it was common practice for senior staff at WICS to attend expensive management training courses, in locations as far flung as not only North America but South America, too, where once again the total cost exceeded £70,000. Now, do not get me wrong: in our report, we recognise the importance of staff training and development to any public sector organisation. Of course we do, but this excessive expenditure was clearly unwarranted, unauthorised and unpardonable.

Let me turn to another wider lesson from what happened at WICS. The commission is a small public body. At the time of these audits, it employed just 25 members of staff. We heard that the Scottish Government sponsorship team did not view WICS as “a high-risk body”. In fact, the Government’s director general for net zero himself told us that he thought that, out of all the public sector bodies he is responsible for, WICS would have been

“the one to operate in a highly efficient way”.—[Official Report, Public Audit Committee, 21 March 2024; c 25.]

This proved to be nothing less than a monumental error of judgment.

The work undertaken by Audit Scotland prompted WICS to carry out its own reviews into its financial transactions and its governance. It forced the Scottish Government to commission further independent reviews into these areas and into its own sponsorship oversight. But let me make the point again: the members of the WICS board who presided over this need to take a long hard look at themselves and ask if they performed the job and if they set the standards of corporate governance we expect and demand in the public sector.

In the report, we also make other recommendations, which I am sure other members of the committee will refer to. But let me be absolutely clear: WICS may be a small body, but the lessons to learn here are big ones. They are about governance, accountability and the proper use of public money. These lessons must be applied across all of Scotland’s public bodies and not just at WICS.

At the heart of a properly functioning democracy must be accountability, and accountability demands transparency. Where that is in short supply, it is the job of this Parliament to force it out of the shadows into the light. That is what the Public Audit Committee has done with this investigation and with this report. These are matters not only of public interest; these are matters of public trust. On behalf of the Public Audit Committee, I move the motion in my name.

I move,

That the Parliament notes the conclusions and recommendations contained in the Public Audit Committee’s 1st Report, 2025 (Session 6), The 2022/23 and 2023/24 audits of the Water Industry Commission for Scotland (SP Paper 783).