Committee
Public Audit Committee 06 October 2010
06 Oct 2010 · S3 · Public Audit Committee
Item of business
Section 23 Reports
“The Gathering 2009”
But you never explicitly got from the City of Edinburgh Council, either from the leader or from the chief executive, in writing that it was arranging for DEMA to take over the liabilities of the company.
In the same item of business
The Convener
Lab
The second item is the section 23 report on “The Gathering 2009”. We have with us Sir John Elvidge, who was formerly the permanent secretary to the Scottish ...
Sir John Elvidge
No, thank you—I would rather you got on with the questioning.
The Convener
Lab
Okay. Thank you.I want to ask about communication and liaison with other public bodies. To go back to the original £100,000 grant, I do not know whether you ...
Sir John Elvidge
I was not involved in any part of making the original loan. Indeed, I was not aware until after the event that the original loan existed, so it is difficult ...
The Convener
Lab
For the record, the original payment was a grant rather than a loan. The loan was a subsequent payment; I think that you were involved at that point.
Sir John Elvidge
I was not involved in any financial transactions before the event took place.
The Convener
Lab
No. At what point did you become involved?
Sir John Elvidge
I became involved in the second half of September 2009, when the company had made it clear to ministers that it could not meet its debts.
The Convener
Lab
Did ministers or other civil servants approach you at that point?
Sir John Elvidge
First of all, other civil servants alerted me to the fact that the company had communicated that to ministers, and to the possibility that complex issues mig...
The Convener
Lab
So your involvement did not start until the second half of September 2009, but the Government had already decided to offer a short-term interest-free loan of...
Sir John Elvidge
Yes.
The Convener
Lab
And you had no knowledge of that.
Sir John Elvidge
No, I did not.
The Convener
Lab
Who, then, would have cleared the decision about the method that was used to justify that loan? The loan was awarded under section 23 of the National Heritag...
Sir John Elvidge
I think that my successor has provided some evidence on that. If I recall it correctly, that evidence was that it is unusual for the Scottish Government itse...
The Convener
Lab
That is right. So, in your experience, that mechanism had not been not used before, given that other bodies would normally do that type of thing. It was ther...
Sir John Elvidge
I am not sure that it should. It is a good question—one of the standard tests for considering transactions is whether they are novel or contentious, to use t...
The Convener
Lab
When you eventually became involved some three months later and you started to look at the issue, did you first determine who had authorised the loan?
Sir John Elvidge
No. I was not much exercised with the past at that point, because the pressing issue was that we were in a period in which, on any given day, an action by on...
The Convener
Lab
It is understandable that you would be focused on the most pressing issue, which was the potential insolvency. However, I find it strange that when you becam...
Sir John Elvidge
At this point, I need to remember that I have no authority to speak for the Scottish Government.
The Convener
Lab
Of course not.
Sir John Elvidge
My view, though, is that there is a system of internal checks. One of the primary functions of the finance directorate, which has knowledge of all such trans...
The Convener
Lab
You did not, however, ask those questions. By the time you became involved, which was in September, a decision had already been made in June to give a £180,0...
Sir John Elvidge
Without pretending to know things that I do not know, I will try to help a bit. There is a clear system of financial delegation in the Scottish Government th...
The Convener
Lab
Ministers talked to officials about coming up with an appropriate solution and the suggestion was made to offer a loan. We cannot get hold of advice to minis...
Sir John Elvidge
I cannot tell you that with any certainty.
The Convener
Lab
Do you not remember reading anything about any of it?
Sir John Elvidge
I can tell you with some certainty that I never read a piece of paper about it. It would be a bigger claim to say that I can guarantee to you that my name wa...