Seòmar agus comataidhean

Okay—I will not labour the point.

With regard to flood defence systems being fit for purpose, we have already spent a huge amount of money, with costs doubling or trebling from original expectations. Of course, new schemes are in play, and we know how expensive they are, but one of the big tests will be whether they actually do the job that they are intended to. The proof of the pudding will be very much in the eating, because what local communities really care about is whether a system will protect them, their homes, their businesses and their high streets.

The Brechin example is interesting. That scheme, which cost £60 million and was completed in 2015, was described to the people of Brechin at the time as a one-in-200-year defence system, but it lasted only eight years before it was breached. I appreciate that the answer to my question will be, “Well, it was an unexpected and extraordinary weather event that caused the breach”, but you have been talking about all the money that is spent on consultants and how few people with world-class expertise there are. How can we spend tens of millions of pounds on a defence system that does not do its job after less than a decade? My concern is whether it will happen again, and I do not think that simply blaming the size of the waves and the force of the wind is good enough.

In your experience, is it okay for an organisation to say that it is spending more money than it has? That is just being honest, is it not?

My understanding is that the root factors of the deficit stemmed from three particular areas. The first related to negotiating pay settlements as part of national bargaining, which obviously had a knock-on effect locally. Secondly, there were issues relating to the Air Service Training scheme, which I will ask about separately, because that was another interesting development.

The third reason for the deficit was a drop in student numbers—the difference between the projected number of full-time equivalent students and the actual number of students who took up courses. While you were speaking, I had a look at the college’s course brochure. One could do a wide and varied range of courses, covering further education and higher education. Was there any feedback on why the number of actual students was so much lower than the number that had been forecasted?

As a member of the Public Audit Committee, I am looking for trends and patterns. There is a broadly similar number of bodies and recommendations, but is there a pattern of fewer or more recommendations being implemented in the early stage or in the long term, or in those that are just completely ignored? We make a big deal of the 93 per cent figure. Public bodies sit where you are sitting now and say, “Yes, we accept the recommendations of the report,” but those are just words. It is about how many of those actually translate into action. We have a bigger remit. You have no statutory duty to follow up on the recommendations or any locus in that respect, but we do, so that is the sort of data that I need to see the direction of travel.

Do you think that Audit Scotland gives enough cognisance to some of the factors that may explain why audited bodies have been unable to implement recommendations? There are a number of external factors. Your recommendations talk a lot about financial sustainability and workforce issues, but there is also a wider regulatory and legislative environment that these bodies are working in, which is outside of their control. Do you think that your focus is too much on whether a body did or did not deliver on the recommendations and does not acknowledge that, even if they wanted to deliver on them, it might be impossible for them to do so?

I thank Mr Beattie for covering many of my areas of questioning, which will save some time. I want to ask two specific questions: one is about the college’s deficit and the other is about its capacity to produce reports.

I was struck by paragraph 15 of your report. I am perhaps reading between the lines, but can you explain to me what happened? I am intrigued by the board’s role in all of this. It seemed to be reluctant or unwilling to produce a budget that showed a deficit. There was an appetite for producing balanced books, but that was obviously impossible, because there was a huge deficit. Did you get the feeling that there was any conflict in relation to the management data with which the board was presented? Where did the unwillingness to be honest about the numbers come from?

I look forward to that. There has been a lot of discussion about the wider sustainability of the college sector, and the SFC has reported that 22 out of 24 colleges have an unsustainable financial future. Does that reflect what you saw at UHI Perth? Is this just a small piece of a wider jigsaw of more systemic issues with college funding?

That said, this is not the first time that Audit Scotland has come to the committee with a section 22 report on a college that has had a commercial subsidiary. We can point to numerous examples. The evidence that you produce shows that a pattern is emerging and that there is a direct relationship between some of the commercial subsidiaries that colleges operate and some of the financial issues for colleges or the bodies that are partners to those entities, so there is an effect on college accounts and audits.

In relation to paragraph 18, on capacity issues, I was struck that you seem to make a direct link between the board’s inability to have a broad financial outlook at UHI Perth and a lack of capacity in the college’s finance team. You say that the capacity issues were

“contributing to delays to starting work on the 2024/25 budget.”

You go on to say that that has been an issue since 2018. It was reported back in the 2018 audit that there were capacity issues, so it is seven years, now, that there have been capacity issues, and the knock-on effect of that is where we are today. Is that not a concern?

We know what the deficit was in that year. Do you know what the turnover of the business—I say “business” but I mean the operation—was over that same financial year? We know that it was spending more than it had, but can you put it into context?