Government ‘shortcomings’ in water body spending saga, minister admits

There were “shortcomings” in the Scottish Government’s handling of spending at a water body.

The former boss of the Water Industry Commission for Scotland (Wics) quit after it was found the regulator spent £77,000 on a Harvard Business School course for a senior executive, as well as a number of meals and gift cards for staff which exceeded gift value limits.

The course and gift cards were both retrospectively approved by Government officials after the money was already paid.

Then-chief executive Alan Sutherland stepped down amid heavy criticism after the spending was exposed by watchdog Audit Scotland, but was paid more than £85,000 in lieu of six months’ notice as a result of his contract.

Climate Action Secretary Gillian Martin responded to Holyrood’s Public Audit Committee’s report on the saga on Friday.

On the spending, Ms Martin said it had caused “significant concern” within Government and changes had been made to structures to ensure such spending could not happen again.

She said: “While it is for Wics to seek Scottish Government approval where expenditure is beyond delegated limits, novel or contentious, a more proactive approach to sponsorship scrutiny should have been applied in these cases and there is now a standing agenda item at Wics sponsorship meetings to discuss any potential approvals required,” she said in a letter to the committee.

“Our focus going forward is to ensure that Wics embeds a culture of compliance and understands the occasions when it must seek Scottish Government’s timely approval and we are encouraged that Wics is now flagging high profile issues at an early stage.”

She added: “I also accept that the Scottish Government’s sponsorship of Wics was not as robust as it should have been.

“While sponsorship of individual public bodies is an operational matter for the relevant part of Scottish Government, I note that several of my senior officials have given evidence to the Committee and recognise that, in relation to Wics, there were shortcomings in how the Scottish Government had carried out its sponsorship function.

“Scottish Government has acted to remedy this, including the commissioning of a review into sponsorship of Wics.”

The lack of scrutiny before retrospectively approving the spending on the Harvard course and the gift cards for staff was a “matter of regret”, Ms Martin added.

The body’s new chief executive David Satti also responded to the committee’s report earlier this month, where he said the body was “grateful” for the document, adding: “The report reflects concerns that had already been identified, and since December 2023 we have taken forward a structured programme of reform to address them.

“The Committee’s conclusions have reinforced that work and helped to sharpen our focus.”