Seòmar agus comataidhean

Thank you for allowing me to join remotely this morning. It is much appreciated.

I have listened very carefully to the questions that have been asked, and I have a few other areas to cover, but I want to clarify a few things that have been said. First, I want to press on the issue of gaps in information and data, which came up earlier in the meeting and was raised in the report by the Accounts Commission and the Auditor General. The report is clear on the matter in referring to specific circumstances. Paragraph 35 says:

“there is currently no consistent, comprehensive national monitoring system in place to assess the condition of existing flood-protection schemes.”

The report then goes on to explain that, in practice, that means that, because information about whether the existing schemes are performing effectively is not available, it is not clear if they are providing the protection that they were presumably meant to provide. It is an open question, but who wants to address that specific criticism?

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.

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?

Thank you for clarifying the language that has been used.

I am trying to understand the role that the SFC, as the funding body, would have played in all of this and its relationship—or lack thereof—with the board that had oversight and governance. You are probably aware of the session that we had with the Ethical Standards Commissioner—I am sure that you would have paid close attention to that—during which this issue came up in a much wider discussion of the quality and performance of board members across public sector bodies. Intriguingly, Mr Bruce made it clear that it is not part of his role to look at board governance. My question is, whose role should it be?

Thank you.

But you cannot do that at the moment.