 Subscribe to See More, and go to the 36th meeting in 2015 of the rural affairs climate change environment committee. I remind everyone present around this table or in the gallery to switch off your phones or at least put them on silent so that they can interfere with the broadcast system. Committee members use tablets for this meeting purpose because the papers are are provided in digital format. Agenda item 1 is a decision on taking business in private, and that means that we're looking to consider item 4. The evidence heard about the SRUC from agenda item 3 in private afterwards. Are we agreed to do that? Thank you very much. Agenda item 2 today is subordinate legislation, and it concerns the European Maritime and Fisheries Fund Grants Scotland Regulation 2015, SSI 2015-359. I refer members to the paper and ask if there are any questions that the members wish to ask or comments to make. Yes, Claudia Beamish. Thank you, convener. I simply would like to put on the record that I'm very pleased to see that the fund is being rationalised and it will support our coastal communities, often very fragile, through the future, both onshore and the fishing industry itself if it's needed in any transition process. I'd like to put on record that there could be a lot more of it if Scotland's interests had been taken care of by the UK Government and that our fishing communities, which catch more than 70 per cent of the catch in Britain, are able to be supported better. That would be even to the benefit of many of the communities that Claudia Beamish has just said. Are there any other comments? If not, has the committee agreed that it does not wish to make any recommendations in relation to those instruments? We are agreed. Thank you very much. On item 3 this morning, Scotland's rural university college, and this business is to take evidence from the chair and the executive management team of the SRUC Scotland's rural college. I welcome the chair, Patrick Macri, the acting chief executive, Janet Swaddling, Jeff Sim, the vice principal for research, Alastair Cox, the interim head of professional services and Mike Weinberg, managing director of SAC Consulting. Welcome to you all. It's a small committee room, so it's very cosy. We wish to begin with questions on a number of areas of your activities and we're going to start off with the veterinary disease surveillance centres, particularly starting with Inverness. Can you give us the latest update on the plans for the VDSC at Drummond Hill and the veterinary service provision in the Highlands? Thank you very much for inviting us to come along to this committee. We very much welcome the opportunity. As you know, the cabinet secretary has recently written in relation to the work on veterinary disease surveillance. We've been continuing to work very closely with the Scottish Government's independent strategic management board. We are very keen to develop a national strategy with regard to disease surveillance, but it's appropriate if I hand over to my colleague Mike Weinberg to take this matter further. Good morning, Mr Convener and the committee. Where we've got to now having gone to a consultation process through the course of the summer is we've modified our thoughts on where we go from a strategic point of view. Our ambition in Inverness is consistent with some of those updated thoughts. What we'd like to see is that there is a widespread Scotland-wide network of facilities where we can gather postmortem material. Specifically in Inverness, what we are looking to do is to move to a facility which would be close to Inverness, which would then be able to provide a facility for doing postmortems to provide an on-going service to the farming community in that area. What we are currently on with is exploring at least four specific routes which would look at facilities which can be converted to provide the service that is required. That's reached the stage now, sort of an outline planning stage really. That's the point that we're at at the moment. The intention will be that whenever we get to the point where we have a facility to move to that there will be no interruption to the service. That will move from one to the other. The follow-on for that is two-fold. One, is this cost effective to be moving? Two, are there going to be a similar number of employees in this section in the work that they do in veterinary surveillance? As far as the cost effectiveness is concerned, yes, with the facility that we are looking at, as I said, we are in the process of working through a number of different options, but we've got clear ideas on where we need to be from a cost point of view. Certainly at this early stage, in the ones that we're looking at, it looks as if that is all doable. That'll be the first thing. As far as the people is concerned, I think the issue there is that at the same time as we'll be moving to this new facility to provide a postmortem operation, what we'd also be doing is moving from the current site across—sorry, this is not the same time, because in the first quarter of next year, we anticipate that the Epidemiology Research Unit would move to the Highlands and Islands new campus, so there'd be a lot of people moving that direction. In broad terms, the number will be very similar, although it's likely that some positions would be at risk out of the disease surveillance centre itself, and we'll be exploring routes to redeploy those people amongst our operations in that area. What proportion of people are likely to be affected by any such move? I couldn't give you an exact number, but it'd be just over a handful of the positions at risk. How many are employed at the moment? On the whole site, there'd be in the region of 46 people. But in the pm stuff that you're going to try. So a half of those people? Yes, so it's slightly more than half. We've actually managed to place—automatically fit into our plan, and then there would be a few positions left, which we need to think through precisely how we do that, and we've got some options on how to approach that. Claudia Beamish. Good morning to you. Could I seek reassurance on the marine aspect of the work, which I understand is at the moment based at the facility that we're talking about, but this is obviously very important for the future. Could somebody clarify that for us, please? Absolutely. That is integral to the plans that we have, so that team would continue to operate out of the same facility once we move to that. Dave Thompson. Yes, thank you very much. Good morning to you all. Just maybe to follow up a little bit on the numbers in Inverness, with the new postmortem facility being created, and the other folk moving to the UHI campus and so on. That's all fine, and it's good to hear about the marine animal stranding. But it sounds as if the capacity of what you're going to be able to do for postmortems and all that, if you're losing about half the 15 people, your capacity obviously is going to be reduced by, maybe I can answer it, a moment. So what is it that you're doing there just now that you won't be doing in the future? I think just a little bit of history that is relevant is that all the disease surveillance centres, all eight of them, were set up in the historic model would have been that all testing of, if I give an example, you would have effectively, a man brings a cow in. The postmortem would be done by a veterinary surgeon. Samples might be collected from that and sent off for various tests. Each one of the surveillance centres would have provided the facility to do a range of tests, microbiology, thick leg counts, whatever was appropriate for the particular case. The direction of travel now, particularly as testing becomes more sophisticated and the demands from the market become more sophisticated in terms of the requirement for turnaround times, competitiveness in the market and getting your unit price of testing down, and the availability of the equipment for doing that testing is more sophisticated and expensive, is that we will be looking, as part of our wider strategy, at trying to concentrate that sort of testing in one or two facilities rather than having each lab equipped with its own, effectively, a duplication of those facilities. So the intention of the wider strategy that we would have is that you will have the satellite facilities around the country where you can gather the material, so the dead cow has got somewhere to go to without having to travel too far a distance, but effectively, once the postmortem is done and the samples are collected, those are then sent to a centralized laboratory in order to cope with that, and you can then handle it that in a way, which is really dealing with the most modern technology. I can understand the logic of that, obviously. There's a lot of sense there. So the jobs that will be going in Inverness will, in the main, be lab testing jobs and maybe some fairly senior people who are doing these tests. Did you give any consideration to the central laboratory facilities being located in the north? I mean, central facilities doesn't always necessarily have to be mean central belt. Did you consider that? No, it certainly doesn't have to just mean central belt, but I think a few things, a few points to make. Firstly, I'm not sure that we're saying we're talking about some jobs that are at risk. We're not talking about any that are definitely going, and we are putting concerted effort into exploring the avenue for every particular one. So each one will be looked on as merits and whether we can redeploy or retrain that comes into the frame. So I think that that's an important thing. As far as the location of any centralised facility is concerned, what we're looking at is a strategy for the whole of Scotland, not just for the north, although we clearly give significant thought to where things go specifically in the north. I think the likelihood of concentrating the whole of our operations up there as a centralised laboratory is unlikely. We have looked at that, we've considered it, but what I would say is that there would be a significant implication in terms of moving the current staff that we have from our main laboratory function in Midlothian. So it's unlikely that we would move the whole of them. Clearly, there are all sorts of implications as far as the number of people is concerned, the costs of moving, the likelihood of moving and the loss of expertise that would be associated with that. I wonder if we could just add to that in terms of, obviously, as Mike has explained about the changing nature of our business, recognising this and recognising the opportunities that the move to the new campus presents. My colleague Jeff ran recently with a number of our team and also with the Highlands and Islands Enterprise Agency, a very significant event looking at new opportunities. Jeff, do you want to just expand on that if that's... I can try and make it pertinent to what we're talking about in terms of the work of the PM, because the stuff that is going to the Highlands and Islands University, we expect to be high standard. We know it's going to be, there isn't any argument with that and we very much welcome it, but the question is, in terms of what we're talking about just now, in previous years the Scottish Government has had to allocate additional funding to disease surveillance, as the total costs come in over budget. Will the additional funding still be needed with the new plan and the new site, or will it not? That's the focus that we've got here. The fact is that, if you look back over the past three to four years, our budget from Scottish Government has actually been cut, so the truth is that the budget was cut, we've had to deal with a smaller budget, and that we've been in a position where the funds coming from Government through the grant and aid scheme and any contributions from the contingency have not been able to make up our full requirements, so we've been under pressure in the last while, and in fact the fact that we went to a consultation this year was really brought about by the fact that we were staring a 10% cut effectively where we were told that the contingency funding wasn't going to be provided, we were staring that in the face, so it may have brought some urgency to the situation. As far as whether we will achieve savings with what we're proposing, I have to say that we will still be under significant pressure. We will be in a better position than we were, but we will still remain under pressure to be able to do everything that we intend to do because you'll understand that maintaining a presence in Mbarnese was not our first choice on the basis of the numbers as you like when we went to a consultation in in June, so we will continue to be under pressure to look for savings in other parts of the business, and I expect that to continue. Graham Dey? I think that it will be useful to get on the record at this point. Is what we're hearing today a commitment going forward to an appropriate footprint in rural settings right across Scotland? Is that what you're committing to today? That is what our ambition is. Our strategy is contrary to what's happened in England, for example, where they've closed a significant number of their disease surveillance centres. Our ambition is to keep a presence around Scotland, and that would then mean that the man with a sick cow has somewhere within a reasonable distance to take that animal. As far as the postmortems, if we're splitting that up, we say that in the postmortems we want to make sure that that's in a locality that the farmer can get to, and then that the lab testing would be moved into a centralised facility over the longer term. Would it be reasonable to expect that the successor committees to this one will not be revisiting this situation in a few years' time? I would hope that that is the case, but we're all conscious that the funding that we receive from government is under pressure, and it would be remiss not to say that if that funding comes under more pressure, we'll have to consider and adapt. Just thinking about that funding at the moment, and the shortfall and so on, and the need to cut your cloth, what impact would the shortfall have on veterinary disease surveillance centres in terms of the wider decisions that you're making in relation to the disposal of assets and strategic direction? Are you saying that you're having to dispose of assets? Does it mean, for example, that Drummond Hill is part of the assets that you would intend to spend in order to meet the shortfall or to meet the costs of change? That's our thinking, so it will contribute to that. It'll be contributory to the move to the new campus as well. The funds from there will be required in order to support that move, so yes, that is a requirement. Thank you for that. I want to move on to questions about governance more widely, and Jim Hume is going to lead on that just now. Okay, thanks very much, convener. Morning everybody. Yes, obviously there are some concerns regarding the lack of the alignment between SRUC and Edinburgh University. All of us had heard how important that was, and it was part of the strategic plan 2013-2018. I should declare an interest. I'm an alumnus of a predecessor to SRUC, and I do have an interest in a farming business that uses SAC consulting in the borders just to make that quite clear. Obviously, that alignment, after some time, failed to go ahead back in June. The committee wrote to Tim O'Shea, the principal of Edinburgh University. He stated to us that, after careful consideration at court, it was clear that the level of control over future operations required by the SRUC board was only consistent with the continued operation of SRUC as a wholly autonomous institution. The Edinburgh Court papers of May 2015 regarding the alignment state, a detailed risk register, is being maintained for the project. The main risks at this stage relate to the participation and commitment of SRUC to the measures that are required to ensure on-going financial sustainability, together with the quality and availability of the information that is needed to support our decision-making processes. I wonder what were the governance arrangements to SRUC proposed that led to the failure of the strategic alignment with the University of Edinburgh. I'm very happy to try and take this matter forward. As an institution, we've enjoyed a very strong close working relationship with the University of Edinburgh for a very long time. Indeed, we entered into the research excellence framework together, which proved to be extremely successful. That seemed to then move to a natural progression to explore a strategic alignment, which we were very clear was our preferred plan, which we worked on for some 15 months in some detail, exchanging information in a very detailed manner. From the outset, our board had been very clear that it was important, not least because we'd only just really come together as SRUC, as a joined organisation, that we wanted to keep the tertiary nature of SRUC. We wanted to keep the integrity of all of the functions, the research, the consultancy and the full educational ladder, and that it was appropriate to ensure that there was governance and protection mechanisms really around that. We had been from the outset seeking to ensure that we could have an appropriate board. That would be clearly reporting to the Court of the University, but nevertheless a board which would be able to have representation from the various stakeholders with an interest in SRUC and which would be able to keep that close links with industry. We were also clear that it was important to maintain a commercial board, given the importance of our commercial activities as an institution, and that those were the key parts of the governance which were clearly required from the outset. As we progressed through the discussions, we certainly saw a significant number of academic benefits, but as we moved to the final stages of discussions, it did not prove possible to reach agreement about those appropriate governance arrangements. I am sure that other people are coming in, but just to clarify, the threat was that you would lose control to Edinburgh University. They would take up some of your functions at SRUC, which are quite wide, which we are all aware of, and that you yourselves wanted to retain the board and its management structure as it was. I am not seeking to retain the management structure exactly as it was. It is important to be very clear that we recognise throughout that the Edinburgh court would be clearly the key body and that any board that was established to look after SRUC or whatever it became called would be reporting to that main court, but it was nevertheless important to ensure that within the governance of the university there would be recognition of the need to ensure that there were protection mechanisms and to protect the longevity of the functions that we cover. That was really to ensure that we were able to continue to deliver for the industry in its widest possible sense. I am just interested given that finances are a real problem for you in teasing out one or two things and terms of what might have happened if you had gone ahead with your merger. I presume because of the merger there would have been a big opportunity to reduce the governance and your overheads in terms of management. Looking at your financial statements, I would have to say that your senior people and your directors are very well paid indeed. Huge amounts of money go to executive directors and others, and even the five of you sitting here—I do not want to be personal, but I am sure that I have my calculations wrong—at least £3.5 million a year. So, would it have not been financially advantageous for you to go through with the merger and cut those management costs considerably? Thank you for that question. I think that the reality is that over the piece that we examine our management costs all the time. In fact, despite the fact that we merged with three further colleges, we have reduced the cost of management, if you look at the overall numbers in terms of executive management costs. We have done quite well to control the costs. The reality is that we need leadership within our organisation. That leadership has benefited us greatly in terms of what we have been able to deliver, both in terms of REF and other matters. From a bore point of view, we are content that the management costs are indeed well controlled. If you look at them overall, we have been able to reduce the management costs and we have not increased the management numbers. We have done really quite well. If we broaden the discussion with Edinburgh, there is no doubt that it would not have gone ahead without, again, considerable management costs, because the individual component parts of SRUC still need to be managed and led. I do not think that there was any desire, if you will. I can only assume that Edinburgh would have been removing any of the executive management team from their roles, because they saw them fundamental to the progress that the organisation had made. I notice that directors remuneration the total figure there is about £1 million a year. We have just been told earlier on that there will be potential job losses and that there will be redeployed folk in the Inverness area at a much lower level in the organisation. It strikes me not being familiar with the pay levels of organisations such as yours that they are not exactly cruel. It is fair to say that the Appointments and Immunisation Committee considers our executive salaries and that they are in line with what we would expect from an organisation of our scale. I think that the other point that I would make is that in 2014 the total for remuneration was £934,000, but in 2015 it was £735,000. It actually came down in 2015. Because we have reduced the size of the executive management team. If I may comment in relation to the discussions with Edinburgh, I can certainly speak personally that it was something that we pursued very actively and very much is our preferred plan. As an executive management team, we certainly wished to pursue that and did not look at this in terms of at no stage in any discussion. Was there any suggestion that we needed to continue with an independent organisation for protection of individual positions? Mike Russell? I might tackle two questions very briefly. First of which is salaries. It is on record and Janet will know that it is on record because she and I know each other over a long period of time. I am strongly opposed to what I regard as the inflation in salaries in higher education, particularly at the top end of the scale. You have recently advertised the post of principal and chief executive. What salary are you suggesting is appropriate for that role? At the current time, I think that it will depend on the individual that comes forward, but we expect it to be around the £200,000 mark. Have you any evidence at all that you would fail to recruit when you would offer a salary more commensurate, for example, with industry? That is a high salary. What is the presence salary scaled for that post? We have taken advice on that from our recruitment agency and they are content that we need to be at that level to attract the individual that we require for the organisation in terms of leadership. I feared as much the interests in recruitment agencies if I might be blunt or to talk up salaries because their percentage that they are paid is often dependent upon the salary of the post. Have you any evidence knowing your organisation and you have unfortunately had a principal who left for whatever circumstances, knowing your organisation, have you any evidence that you require to offer a salary of that level in order to get a leader for the organisation that will lead you forward? Have you any evidence at all? I think that the unique nature of SRUC means that it is a little bit different because of the different aspects of it. It is not one, it is an education research consultancy, so therefore the person that we are looking for is fairly unique and therefore evidence is very difficult to find and that would be my honest answer to you. That is an opinion and you must admit that Mr Macri is not evidence. I think that there is considerable skepticism. To be fair and to be very straight about it, considerable skepticism is that the level of salaries being paid is necessary within any higher education institution, including your own. Can I then come on to the Edinburgh merger, which does concern me? The principal said in his letter on 17 November that after careful consideration at court, it is clear that the level of control over future operations required by the SRUC board was only consistent with the continued operation of SRUC as a wholly autonomous institution. From that, I understand that the 15 months of discussion could not produce a structure that allowed SRUC to essentially integrate into one of the world's leading universities, which wanted to have a rural university structure, and you are familiar with the concept of rural universities in the rest of the world. In Scotland, it was viewed as very desirable to have one. Surely, that indicates that there was something wrong within those discussions and that there is something wrong in the way that the SRUC is seeing itself if it cannot provide essentially the functions of a full rural university because of its structure and the views of its board? I think that it would be unjust to assume that. I think that the board was very concerned about the stakeholders that we also represent. As has already been said by Janet, we laid out right at the beginning what we thought the structure should look like. There were compromises in there for the university to consider, and they did not want to take that forward. We did not think that they were particularly onerous, but it was more about us ensuring that, from an industry point of view, it was not compromised in any way, shape or form going forward. As I said, it was put on the table, if you will, right at day one what we thought it should look like. We did speak about looking for a way forward, and we could not get that a way forward. I have to respect the university's views as they respected our views. Last point, but I just want you to comment on this analysis. I am a supporter of SRUC and you will work closely with your previous chair and with your previous board, but it seems to me that you have a considerable problem. You were a standalone organisation with those two parts, SRUC and the consulting arm. You absorbed three colleges, and that was the right thing to do. You then had a period under the principle where there was a bit of vagueness, but you were looking for degree awarding powers. That was a key ambition, not just ordinary degree awarding powers, but research degree awarding powers that were being discussed. Then you decided that you would go into a merger with Edinburgh University and continue to pursue degree awarding powers, and you were not pursuing them. Now, who knows? It seems to me that there is a vagueness about what your purpose is and a vagueness about the next step, which you may be looking into a new principal and chief executive to help you decide, but it is a matter of danger for you in two ways. One is that there is a space in Scotland for a full rural university. You were discussing those matters with Chinese universities and others. Maybe another Scottish university will fill that function. Maybe the one that you are no longer merging with is a danger to you. The second area is that it is not clear—you talk about assisting the industry, I think that you do that—but it is not clear what your academic functions are. It is not clear what your functions are as an academic institution. I think that we need some clarity on that. We pursued the discussions with Edinburgh University because of our very strong close working relationship with it. We could not have gone into any more detail. We did at the outset very clear about the need for governance that would ensure that there was the ability to sustain agriculture and land rural activities within the university. This is against a background where the university had previously come out of agriculture. This was one of the fundamental concerns that was there from the outset. The fact that, as we worked through those discussions and towards the end, we could not crystallise that in an appropriate matter, I think, was a point of some significant concern for all of us. Are you differing with Timor Shea's analysis? The system of Shea is quite clear. It says that the level of control of the future operations required by the SRUC board was only consistent with the continued operation of the SRUC as a wholly autonomous institution. You appear to be saying that Edinburgh University was, in some sense, not entirely serious about its commitment to the land-based industries. Is that what you are saying? What I am saying is that we were seeking protection mechanisms for the future. You accept the analysis that even your friends would look at and I count myself as a friend of SRUC, would look at the organisation and say that you have lost your way and that you need to find your way again pretty fast. No, I would say that we have definitely regrouped after the decision by the university. We are very clear that we see ourselves as having a very strong future as an independent organisation. We are very clear that we have a role of national strategic importance to deliver upon. We have always said that the next step in the journey for Scotland's rural college is to become Scotland's rural university college. We are now actively looking to pursue whether we should seek our own degree awarding powers. That is something that we have actively discussed with the Scottish funding council and have also begun discussions with Scottish Government. It would be very helpful for us to know whether there is support for that, because we are effectively at a fork in the road. If there is support for that and for there to be a dedicated agricultural land-based rural university for Scotland that provides that appropriate focus and provides that longevity and protection for the future, where like-minded activities could be focused, we believe that there could be a very strong future developed for that. That is the stage that we are at. If there is not support for that, if there is not support for us to pursue degree awarding powers, that clearly has a fundamental bearing on our strategic future. That means that we need to look at what other form of alliances we need to have in place. I think that there is one point that is extremely important to be on record. Whilst we have enjoyed a very strong relationship with the University of Edinburgh, we have also enjoyed a very strong relationship with the University of Glasgow. If we look at our degree provision, it is only some 13% that is actually accredited by the University of Edinburgh. 87% is actually accredited by the University of Glasgow. We previously had strong relationships with the University of Aberdeen where there was accreditation. These are all strong players in the areas that we have previously been strong players. Some continue to have significant strengths in veterinary areas and other areas to do with the land. We are very clear that there is importance to ensure that there is a focus for these activities into the future. I think that we do have a strength in our vision. Glasgow School of Art, for example, has no degree awarding powers and has those awarded by Glasgow. That is a stable situation. I have to admit that I am still concerned about what I am hearing now. You might or might not want degree awarding powers, depending on whether other people support it, rather than on an argument within the institution. You might or might not have a partnership with Glasgow, Edinburgh or Aberdeen. I think that more clarity is needed in the strategic direction. I am not saying that you need it today, but I am concerned by what I hear, convener. I have just begun with a supplementary question that came out of Mr Russell's questioning. Mr Russell mentioned the absorption of the three independent colleges some years ago as being the right thing to do. I was not quite as convinced at the time that it was the right thing to do, but I wonder if you have any comment on what impact that absorption had on your governance structures and whether some of the issues that we are exploring today could date back to that. The merger to form SIUC was particularly challenging. It brought together four institutions. The way in which we achieved it in governance terms was that the three colleges of Barony, Elmwood and Oakbridge were merged into the legal entity of SAC, but we were very clear that we wanted to effectively launch this as a new institution, which is why we changed the name to SIUC Scotland's rural college, the U being there with the long-term intention potentially of it becoming a university. That was the intention at that stage. The governance that we adopted, we adopted governance on merger to recognise the importance of education and research at that stage with dedicated boards, and that proved to be particularly relevant. In terms of streamlining our governance and in terms of efficiencies that we have been referred to earlier, we subsequently have changed that into an academic board. It is important to say that during this period of merger there has had to be a lot of focus on rationalising, changing and developing a new culture for the organisation and a set of shared values. It is perhaps better to look at what the funding council said. The funding council said that this had been a success, but they did recognise our ongoing estates and finance issues. In terms of our governance now, we have been through a governance review at board level, which I think has been effective. It is important to say that we have an academic board and we have just strengthened that academic board. Indeed, that academic board meets again tomorrow. I think that there is a vibrancy in the organisation now about developing the academic strategy for the future. I want to be clear that we do have a clear focus on the fact that we would like to seek degree awarding powers because we do see that that provides an assurance about our future and ability to develop our independence. One of the points that hampers us at the moment is the fact that we are not able to play on a level playing field in terms of the international stage. It is there that we would be seeking to increase our numbers in terms of international students. I am grateful for that. We will come on to one or two of the individual colleges later on and some of the impact on them. You have mentioned several times that you have three key aims in the field of education, research and consultancy services. How do you prioritise those within the governance structure and how any priorities that are within the governance structure are reflected in that structure? Within the governance structure, we give those functions equal weight. It would be fair to say that, as we work through the merger, education matters dominated board business. As a result of that, one of the activities that we undertook was to set up a dedicated board to look specifically at consulting activities, which we have now really embedded into our governance structure in the form of the SAC commercial board, which looks predominantly at the consultancy activity but also at the commercial research activity. We give equal weight to the three functions. In a more general sense, I am aware that since 2012 there has been a code of governance that is being reviewed at the moment. Can I ask whether that code has impacted on you in any way and whether there are any significant changes that you would wish to see in the review? Yes, it has impacted on us in terms of the HE governance code. We are now fully compliant. One of the major changes that we had to make was to bring student and staff representation on to the main board, which we have done and which we have found to be very effective, and we have welcomed that. You mentioned that education is your prime function in some respects or worse to that effect, but in June 2015 the vice principal for education retired and the vacancy has not been filled, so why was that and how that has been managed? The Government. True, David McKenzie retired, and we took the decision that it would be appropriate. We have two assistant principals within the education division, one who looks after higher education, one who looks after further education, and both of those assistant principals are currently acting up and together with myself running the division. We are actively looking at how we take forward our academic affairs within the institution. One of the things that we, as an executive management team, have been looking to do is strengthen our cross-divisional working and, in particular, how do we strengthen the cross-divisional working between education and research? The vice principal for education, as opposed to having existed for a good number of months, is still recruiting for a new principal and chief executive. Is that one of the reasons why there is not such a hefty bill for the top people in this last year? Has that reduced your costs, in fact, by the delay in the appointment of those particular posts? No, I don't... Does it suggest that we save money on salaries from one year? Was it Mr Macri? She said that it had gone down from 900 to 750,000. Is that part of the reason? That, well, effectively, we have some restructuring within the executive management team. We would be looking to keep that as lean as possible into the future. In terms of the appointments that we are talking about, education is pretty central to your aims, as you have explained to us, in the Government's arrangements and so on. In terms of the appointment of someone to do that job or the principal and chief executive, are you thinking about that in terms of the academic background that successful candidates might have in order to be able to take forward this very key area of your operation? Well, I think in terms of the... We clearly need a rounded set of skills for the management of the organisation and it is absolutely pivotal that there is appropriate academic leadership. Clearly, on our executive management team, Jeff has our leads on academic matters, but in terms of the skillset for the principal, chief executive, that would be a matter that I would need to hand over to Paddy, but I think that it is important to put on record if part of the questioning here is... I have made it very clear that I am not a candidate for that role. Alluding to that, but obviously a senior academic on the executive team is quite important when education is so central. I do not know whether Jeff's experiences and research are whatever, but the actual business of getting people in through the doors at the basic level is the only way you're going to have a college that actually becomes a university. Do you want a comment on that? Yes, very happy to. Yes, I do have experience in education, particularly post credit education, but my primary experience is in research. I think that it is absolutely central that we have experience that spans each of those functions. As Janet has said, that is what we are seeking to achieve both in the new appointment but in the wider executive team. As she has also referred to, I think that our current structure has had many advantages but has possibly weakened some of the linkages across divisions. We feel that we have got a really strong contribution to make to tackling some really important local and global challenges around food security, environmental security, resource use efficiency and the USP we have is the combination of consulting, research and education skills. What we see as a clear aim of our future strategies is to maximise the benefit of having those functions in the single organisation. In relation to the FE and HE piece, as Janet has already mentioned, we have two very capable people there at the moment. We currently have that being managed by Janet and them very successfully at this point in time. In relation to the chief executive principle, before we actually went out into the public domain, we took views from all the staff and they were all engaged in the process as to what the job specification should look like. We have into that job specification a clear academic need, if you will. I think that we fully recognise that that is extremely important going forward. Just for the purposes of clarity, can you tell me how many members there are of the executive team in total and how many would have an expertise on education, research and consultancy? There are four of us that are here. I understand that SRUC is currently selling or has possibly sold a number of assets, including Elmwood Farm 5, Casse of A, Fish Farm in Dumfrieshire, Westwoods Aberdeenshire and Boghall Farm and Farmhouse in Midlothian. The Scottish Parliament information service understands that the closing dates were at the end of October 2015. I would like to clarify that, whoever chooses to answer this question, how were the assets selected for sale and could you provide an update and is the sale crucial to the financial stability of the organisation and will it have an impact on higher and further education provision? That might be helpful. When we were SAC, we recognised that we had excess assets. After the merger, bringing together the organisation, it became very clear that we have over twice what we actually need and a number of excess assets. We did some very detailed work on that throughout a lot of 2014, which resulted in us putting together an infrastructure strategy, which looked at those assets that were surplus to requirements and which had no direct impact on any of our operational functions. Those were identified, taken forward to the board and were approved for disposal. I think it would be fair to say that none of those which we have disposed of yet have required us in any way to displace activity. In terms of the sales, we have had a number of sales that have concluded in recent weeks. Some of those have finalised, but a number are still with lawyers for finalisation about various different aspects, depending on the offers that have been made and so on. Can you clarify for us which ones have reached completion, please? I need to turn to Alistair for detail. All of the properties that you mentioned were currently in discussions with the preferred bidders on going through the legal process on that front. Right. Can you clarify if there are more in the pipeline then, please? I am able to confirm there are and there will be more asset sales, yes. Can you clarify for us what those are today, or could you put that in writing for the committee, please? We can confirm them, yes. Today or in writing? I can't, I think it would probably be easier if I confirm them in writing. Right, thank you. Then, if you would like to proceed to, could you or one of your colleagues explain what impact, if it will have an impact, this would have on the delivery of higher and further education. You have said that they do not affect anything, but can I see reassurance on that? Absolutely, those assets that have been sold to date will have no direct impact on delivery. Right. Lastly, there have been concerns that you will no doubt be aware of, raised in the Scottish Parliament on 7 October. I can go into that detail if necessary, but if you are aware of that discussion with the questioning of the cabinet secretary on the Barony College, I will just leave that as a question. Is the Barony campus going to remain a key part of future plans and how do you propose to ensure that FE provision continues on this site? What will remain a key part of our plans is to ensure that we have delivery in the west of Scotland. In particular, in terms of the south west, we recognise the importance of FE and skills delivery in Dumfries. We have been actively working with colleagues in Dumfries about the options with regard to how we take things forward. We have very successful research activity at the Crichton royal farm adjacent to the Crichton campus, and we have a successful consultancy office also based there. Wherever possible, we are trying to co-locate our activities because we see the benefits, particularly for students in order to be able to experience research and consultancy activities. In working through, we have also learned that it is important wherever possible to co-locate with other educational partners. I am pleased to say that we enjoy a good working relationship with Dumfries and Galloway College and that we are in active discussion with them about how we could further collaborate. We have identified that a possible preferred option is to relocate to the Crichton campus, but we are in the process of reviewing that effectively in terms of our student numbers and our student activities that we perform. I think that it is important to make reference to the national land-based strategy on education and training, which was published in August, which looked at a significant number of different areas and involved feedback from employers. We are now reviewing our infrastructure strategy in light of that document as to what we take forward. I can give an assurance that we are certainly looking to confirm that there will be activity in the west. We are actively expecting that to be in Dumfries, and we are working really through the options that the Crichton campus would present. Thank you. You have not specifically answered my question, although you have given me a lot of helpful detail. Can you answer the question about seeking reassurance on the Barony campus? I am giving reassurance that there will be activity in the south west, in Dumfries, and probably at Crichton. In terms of whether we continue at the Barony campus, that is not currently our preferred option. I was waiting for the microphone. It has probably been given quite a lot of detail. I am quite well aware of Barony. My two sons went to Barony, so I should maybe state that as well, but that is quite a bit in the past. I think that my father also went there, too, or whatever its predecessor was in those days. Barony campus has quite a large farm, obviously, and the Crichton Institute has very much concentrated on dairy, but there is agricultural engineering, forestry, and all sorts of important things happening at Barony. I think that I am concerned, like my fellow south of Scotland MSP, regarding the Barony campus, because we are well aware of its importance to that area. I am wondering in your deliberations whether you have made a decision yet regarding keeping the Barony farm and all its activities. If there was a move to Crichton, could all of those activities be moved forward? I cannot see how that could happen, personally. We have not made final decisions. We are in the process of working through what are our options. It is worth saying that we are obviously, like others, working in an environment in which we are not entirely clear what our future funding will be. We need to be very clear that what we plan to do, we can afford to continue to do into the future. I think that, specifically with regard to the Barony, it is worth saying that the condition of the buildings and the condition survey that was undertaken post merger would suggest that the monies that would need to be reinvested are certainly not monies that we have available. We have discussed this actively with the funding council and we have been encouraged to explore the Crichton campus option. I represent the western half of Dumfries and Galloway, in which forestry is of immense importance. The Barony plays an important role in forestry education, particularly from a practical perspective. I am open minded on restructuring, and I can understand the possible need to do so. Is it possible to give an assurance that the current courses that are available through the Barony, particularly in forestry, will not be diminished by any structural changes that you make? What I would say is that I would refer back again to the national strategy on land-based strategy on education and training, because that provides some pointers in terms of what we need to do. With regard to forestry, we recognise the significant importance of forestry to the area. Indeed, we also recognise the unit within Inverness College in terms of the National Forestry Centre. I am pleased to say that we have had collaborative dialogue, and I think that we would envisage that there is a role for both institutions to continue with forestry, given the geographical distance. I think that something that we would like to do is to improve our links with the forestry commission in the area, so that we can ensure that we are as joined up as possible and deliver the practical training that we recognise is necessary. Thank you. It is not quite the categorical assurance that I was looking for, but I will monitor that as it goes forward quite carefully, because I cannot overstate the importance of practical forestry training in the south-west of Scotland. I think that that sort of typifies the problem that I have, and I just want to reiterate that problem. Nobody doubts that you have considerable financial pressures upon you. Nobody doubts that you have inherited an estate, which is, by new, means ideal. You have buildings here and buildings there, and it is difficult. This is the same problem as I believe the committee experienced, the ICEN experience, when we had the first discussion with your staff about the veterinary service, which is that it was really difficult to know what you intended to do. I do believe that that comes back to a lack of a strategic vision or plan. If you have decided and want to dispense with a barony college, which may well be very regrettable, but may well be necessary within the plan, it would be best to say, yes, that is what we have decided to do and to take the consequences of the political row that will then take place and at the end of the day to do it or not to do it. Similarly, if you have decided not to deliver forestry, I think that that would be wrong in terms of the needs of forestry. I actually think that you need to improve your forestry delivery and increase it. I am hearing from people who want different forestry training, but it is clarity. It is clarity on what you intend to do and when you intend to do it. I do believe, with the greatest respect, that the problem is that you do not know that because you do not have clarity on a strategic plan. You have either got one partner or another partner, you are not sure whom, you are either delivering training or you are delivering high-level education and you do not know which or whether you should do both. It is an observation, but I think that you have just illustrated that uncertainty today, which, over a period of time, needs to be resolved to have a secure future. Can I say that I take on board that comments? Having effectively been about six weeks in the chair, you can imagine that currently my view is that we need to absolutely get that clarity established very quickly. I am very content, despite us looking for a new chief executive principle, that in Janet we have a very able individual who will shape this. We have just come through a period in which, if we will, we have parked up because we were letting the alignment process come to a conclusion and that came to a conclusion in June. Since then, we have changed, if you will, the chair and the board. We have new members on our board and one of the things that we are very clear about is that we need to get that vision clearly established for everyone, including our staff. That is something that we are working very hard on at this moment in time. We do have some strands, if you will, of what that should look like. Certainly, to a degree, awarding powers are a core part of that. It is fair to say that we are working on that extremely hard. I think that it would be foolhardy for me, as a chair, to say within six weeks, here is the plan. I would rather give it time and I would like to think that you might give me time to make that happen. I would suggest to you that I would like to give you that clarity very soon. I think that that is extremely helpful. I am very grateful that Mr Mackay recognises that that is a core problem. You cannot, with the greatest respect, be parked up for long. The tires are losing air. The people are going past you. You need to get out of that labour as quickly as possible, but you also need to go where you are doing. You cannot just wander out of the labour and say what is next. You will get run down. I think that it is fair to say if I can give the committee any sense of—the board is very clear about that. I convened my first board meeting in October. I made it very clear that that first board meeting is exactly what you have just said. I think that it is fair to say that we had to get clarity, we had to get our vision and we had to be very direct about it. I said at that point in time that we are going to have to face up to tough decisions that will not always be popular. I realise that, but that does not mean that we are wrong decisions. It means that we need to get that. As I say, if you can bear with us, I think that that clarity will come through very soon. In terms of clarity and vision, sometimes things out with your control happen that create a problem for you. I want to address the Onwood College. My understanding is that five colleges have indicated that they intend to vacate the Onwood campus in August of 2016. I really want to seek reassurance from you as to the impact on and the commitment to on-going SRUC-delivered courses in that location. I ask that as a constituency MSP for Angus South, from where some of your students are drawn. We have to recognise that, simply because a college is located in a particular place, it does not draw from a much wider area and therefore has an impact on that area. I would like to explore that subject with you. Obviously, when we merged, an Elmwood College became part of SRUC. For the first year, the totality of Elmwood College was within SRUC. Then we demurged about 40, 45, 50% of it back to Fife College. Throughout that process, we had envisaged that we would have a collaborative arrangement to be co-located. We now have a final decision from Fife College that they intend to come out next summer. It clearly has a substantial bearing on what we do, because it is a significant-sized site. That is a fundamental change that we have to work through what are the implications. There are also implications in terms of the national land-based strategy that we are beginning to see come through. We have had some dialogue with the principal of Fife College, and we are in active dialogue with Fife Council about what might be the options in terms of how that is taken forward. Indeed, whether that means that some of the provision that is undertaken by ourselves should be undertaken by others, just in terms of whether that makes more sense from a management perspective. However, this is early days. We have only received the decision within the past few weeks, and we are actively working through what that means. Can I just explore that? When you talked about delivery by others, do you mean that other locations are on that campus? I do not know. I appreciate the difficulties when this is just a reason, but that will not offer much in a way of reassurance to your staff or students. However, we have had a situation at the Onward campus where we have not been able to achieve the student number targets this year. They have been running at approximately 70 per cent for both FE and HE. That is another factor that we need to try and understand why that has arisen. What are the implications in terms of the overall picture? What is appropriate for SIUC in terms of future delivery? I take your point about the number of students, but there are some courses that are fully subscribed, and I think that there is one over subscribed. Is there not scope for taking up Russell's point about expansion of forestry delivery? Is there not an argument for having running forestry courses? For example, Elmwood, we have forests in the east as well as the west. It is certainly something that has not arisen at all before, but it is certainly something that I would be happy that we looked at. I think that one of the things that is pertinent and we find increasingly is about ensuring that we have a critical mass of students, an appropriate number of students together, to have that kind of student body, to give them the kind of student experience that they are looking for. Again, that is one of the challenges that we face, to be able to bring together appropriate cohorts, not only from the point of view of what would be the benchmark norm and what would be appropriate from an efficiency perspective, but also from the student experience angle. I accept that point, but is there not perhaps indicative of failure of marketing the college and what it offers? It seems bizarre that you are located close to the home of golf, for example. You are only a few miles from the Angus Gwends, which is a centre of gamekeeping. If you are struggling to attract numbers, does that not tell you perhaps you need to be more active in marketing what the college offers? I can absolutely assure you, because it is something that I have looked into. It was something that we were very conscious of, that there was a mixture of identities within COOPER. We put more resource into marketing this year than we have done before, and a disproportionate amount went in there. I do not believe that that is a result of marketing problems. It is a final question from Sarah Boyer. Thank you very much, convener. It has obviously been quite a difficult period financially, with a lot of uncertainty ahead. Can I ask about the failure of the strategic alignment with Edinburgh University? Has that presented a particular funding shortfall for SRUC, and how do you propose to mitigate it? No, I would not say that it presents a funding shortfall. I think that the alignment gave rise to potential opportunities, particularly around potential capital developments with the university. However, in terms of our operational position, the kind of margins that the university was asking us to project were extremely significant. We have done and continue to do our own planning, but, like many, we are awaiting the results today to some extent of the comprehensive spending review. What is that going to give rise to? What are the resultant implications in Scotland? We are at the moment scenario planning. We returned last year a small deficit. It was around about 1.5 per cent on turnover, but I have to say that that is consistent with, for example, at least one of the ancients that I looked at. We are working very hard this year to try and achieve a similar position. It is not easy by any means, but I believe that the measures that we are taking, some of the restructuring that we are aware that we continue to need to do, should put us in a position where we have a viable institution into the future. Can you translate what you meant by the university margins being too tough? What does that mean in practice? In terms of when we were working through with the university in terms of some of the financial planning, some of the margins that we were being asked to model were in the order of 5 per cent and 7 per cent. If I could perhaps turn to oversight by Oscar in overseeing the governance arrangements, you will be aware that recent reports by Audit Scotland have highlighted the need for robust and transparent governance arrangements. I am curious as to whether SRUC's governance arrangements fit in with Oscar rules, and have any recent discussions been held between the SRUC and Oscar about the governance structures at the college? I am able to confirm categorically that our governance is absolutely compliant with Oscar rules. We are a charity and we take those responsibilities very seriously. On an annual basis, the board is reminded of their responsibilities as not only directors but also as trustees. I understand that there is no published report accompanying the accounts of any external assessment or audit of such compliance. The statement within the accounts by the independent auditors, Ernst and Young, would be sufficient to give that reassurance. Thank you, convener. It is a very brief one going back to forestry, I am afraid, but I think that I am right in saying that the only forestry degree available in Scotland at the moment is at Aberdeen University, and that Aberdeen University is looking to end that course and embed forestry in another part of its curriculum. Given the strategic importance of the forestry sector in Scotland, I wonder if you get degree-granting status, whether a degree in forestry is something that you might look at taking forward? Absolutely. I think that this is exactly the type of activity where we see that we could have a very real role to play for Scotland in terms of being able to provide for those specialist areas. You mentioned forestry. I think that one of the other areas that we are also conscious of is around veterinary nursing, and we are pleased to be working with Edinburgh College in terms of the transfer of the veterinary nursing and also with North East Scotland about veterinary and animal care transfers. What we would want to look to is areas of growth. I know that we have talked today about a lot of our challenges, which are ones that are perhaps around restructuring and selling of assets, but what we really are wanting to do is get ourselves into a position so that we are strong as an institution to really build on our specialist nature and develop into those new areas where we are not served in Scotland with those particular qualifications. Thank you very much. Obviously, we have been talking about issues of vital concern to the health of rural Scotland today, and I would not want to diminish the fact that everyone is concerned about the kind of spending that there can be from public sources to ensure that rural Scotland is healthy. We also understand that Scottish rural college development is in a state of flux, and you have elucidated some of the facts about that just now. We will reflect on your evidence and we will be communicating with you due course. I would like to thank Pat McRae, Janet Swaddling, the team for coming just now, and we will have to move on at this stage because at the next meeting of the committee, which is tomorrow at 9 o'clock, we will be considering a draft of the stage 1 report on the land reform that Scotland built in private. As previously agreed, the committee will now move into private session to consider evidence heard this morning. I now close the public part of the meeting and ask the public gallery to be clear. We will take a short break.