 I welcome members of the press and public to the 19th meeting of the Public Audit Committee in 2015. Can I first of all ask all those present to ensure that electronic items are switched to flight modes so that they do not affect the work of the committee? College, can I move to agenda item number one, which is the decision in taking business and private? The question is that we take agenda items number five, it's six and seven in private. I will agree. Let's move to agenda item number two, which is all evidence on the AGS report entitled, 2013-14, Audit of Coatbridge College Governments of Sevens Arrangements. I say just before we begin our evidence today, I would say a few words on record about the email that we received late last week from the Scottish Funding Council forwarding a copy of the Lincston report. I know that the colleagues share my frustration that this report has now only been shared with us by the funding council, particularly as it was in discussion with the Cabinet Secretary in July of this year about its relevance to the governance issues at the college. I appreciate that there may have been some sensitive issues around the report, but nevertheless it is my view and the committee's view that it would have been of assistance to the committee for this report and provided it as much earlier for our work. Also, the funding council also wrote separately last week with information relating to principal severance arrangements. They have undertaken to get the missing information to the committee by the 7 of December. They have advised that they did not see the business cases because they rely on the audit process. I think that the committee would agree with me that it is imperative that we receive all the information that has been requested and the relevant documents before we can move on with the deliberations on our draft report. If the colleagues will agree with the statement. Good morning again, and I welcome our first panel of witnesses. I welcome John Doyle, the former principal and chief executive of Coatbridge College, and John Gray, the former chair of Coatbridge College. I understand that Mr Gray would like to make a brief opening statement. Good morning, ladies and gentlemen. The last time I was here, I talked about setting this inquiry in the context of the college merger process. The merger policy was instigated by the Scottish Government, and once groupings of colleges to be merged was finalised, very little direction was given as to the way that this should be managed. College groupings were left to get on with the process the best way they could. In Lanarkshire, the proposal started out as a federation structure. It then moved to a merger proposal, and in the middle of that, Cumbernauld and Motherwell agreed a merger without involving Coatbridge or South Lanarkshire College. Coatbridge eventually capitulated and was effectively taken over. South Lanarkshire, as I understand it, is still not integrated and integrated part of New College's Lanarkshire. As this process was evolving, many discussions took place regarding process and rule setting, particularly regarding two severance payment arrangements for the many staff who were clearly going to lose their jobs through no fault of their own. The board policy from the start was to try to make sure that Coatbridge staff were fairly treated and given proper job opportunities in the new structure and for those forced to leave a realistic severance scheme. As far as I am concerned, the severance arrangements when I left are clearly described in the remuneration committee and board minutes of 23 October 2013. At no time was any suggestion put forward by anybody that the payment to John Doyle in particular was excessive or should be stopped or reconsidered. In short, the important point for me is that, at the end of the day, all staff in Lanarkshire colleges who lost their jobs were to receive the same compensation. There was no proposal for any enhanced payment to senior managers. There was only one scheme. For the principle, the contractual entitlement to six months' pay in lieu of notice is a contractual matter and is totally separate from any severance pay agreement. There was no payment made regarding his pension. The Scottish Fund on Council made it clear that it would only fund up to the guideline amount, but if the board wanted to exceed that amount, that was its responsibility and the college would have to fund any balance required. That was understood by the whole board and was agreed without question at the meeting. I would also like to clarify one or two other wee points. John Doyle never asked me for a severance package, either verbally or in writing. I served as chairman of the board for almost 12 years without remuneration. I was not entitled to any severance payment, nor did I receive any contrary to some reports. The funding council confirmed that other colleges had made severance payments in excess of the guideline. Did their auditors comment on that and will those colleges be subject to the same audit process that we have been? I leave that question with you. In conclusion, I believe that there was no failure of governance on my part at Coatbridge. The auditor clearly did not examine the situation in sufficient detail before commenting in her report. She clearly did not see all of the relevant documents, and in particular she made no approach to either John Doyle or myself for explanation or clarification. The auditor general's comments had no foundation, in fact. Her conclusions were entirely her own. We are insulting and damaging and should now be retracted, and if not, I would like to know the reason why not. Mr Doyle can open questions by clarifying for the record that you were the accounting officer for the Coatbridge College. For how long would you have been the accounting officer? For the period, I was in the post from November 2004 until I left on 31 October 2013. In terms of responsibilities of the accounting officer, those would be set out in the Scottish Funding Council's guidance of 2000. Is that correct? I understand that. I take it that that is a document that has been used by an accounting officer. You would have been familiar with it. Is that correct? I made myself aware of it at the time, through the collapse of the board, to get a copy. I should be sending a copy to everyone else in the Renumeration Committee, and it was going on the board's intranet. I read it at that point. You made yourself aware of it, so can I refer you to paragraph 18 of the document, and it says here—if I can paraphrase part of it—it says, that the college's accounting officer has personal responsibility to notify the council's chief executive if they consider that the college or the board management plan, of course, of action that is in conflict with or infringes guidance or instruction that has been issued to the college or appropriate best practice. It is particularly important if it is a controversial or novel action that has been contemplated in any severance package. I take it from this paragraph that it makes it clear that, given that the college was proposing to go beyond the principles of the 13-month severance package, you had a personal responsibility as an accounting officer to provide that information to the Scottish Funding Council. Is that not correct? Can I confirm that everyone here has a copy of the submission that I sent in? I am just going to address it because I hope that, in part, in my submission on Monday, I covered part of that, and I will expand on that if I may, convener. When Mr Gray, after the Renumeration Committee on 28 January 2013, Mr Gray came into the college the next morning and had a meeting with me with regard to the Renumeration Committee and, in particular, the conversation on my proposed severance agreement. I had read the documentation and we had a long conversation about the decision making process by the Renumeration Committee and the rationale behind the decision that it made. I went over, as I have said in my statement, every aspect of it in terms of suitability, affordability and rationale, and I thought that I made that very clear in my submission. However, I am very happy to expand on it. I was very aware of the guidance. I wanted to make sure that I was engaged with the Renumeration Committee in the context that the guidance said that, if there was something different, the explanation that I got from the chair of the board who had met with the Renumeration Committee was... Mr Boyle, can I just clarify the question that I shared with you? Within that paragraph, it makes it clear that, given that you are going beyond the terms of the 13 months, I will allow you to come back to your statement later in terms of the information providers. Please answer the question that I put to you. It is very clear that you were going. It was proposed that you would go beyond the 13 month period that was recommended by the Scottish Fund Council, so you had a personal responsibility. I cannot find any legislation that says that you can decide at any point during this process that you are no longer the Accountable Officer. It is very clear that you have a legal responsibility as the Accountable Officer for that organisation to advise the Scottish Fund the Council that the board are proposing to go beyond the terms that has been recommended by the Scottish Fund the Council. Why did you advise them of that? On the basis that... You are not being straightly saying, Mr Boyle. This is one of the reasons why you are back before the committee. You are creating a smokescreen and putting seniors down all sorts of different pathways. It is a very clear question. Why did you not use the Accountable Officer and not provide that information to the Scottish Fund the Council and also to both the external and internal auditors? It makes it very clear in this document, which I expected you not to be just aware of but to know in detail that that is your responsibility as an Accountable Officer. I do, convener, take exception that I have in some way laid a smokescreen and let me answer the question if I may please directly. I was advised by the chair of the board, the chair of the Renumeration Committee the next day that he had, in accordance with the guidance, spoken to Mark Bathill, the then chief executive funding council and advised him that it was the Renumeration Committee. It was quite clear to Mark Bathill that the Renumeration Committee of the board was going down a path that was in excess of the 13-month guidelines. I was made aware of that the very next morning. I had a long conversation with the chair of the board on those aspects and I was satisfied that the funding council at chief executive level were well aware of the detail because the chair, as per the guidelines, had spoken to him about it. I can also refer to paragraph 19 of the Scottish Funding Council's guidance, which says that it is part of that paragraph. It says that it is not acceptable for the Accounting Officer to abstain from their personal responsibilities by contending that they are not part of the Renumeration Committee or form any part of the process. As the intended best beneficiary of the service package, the Accounting Officer will at some stage be made aware of the settlement and he will hear those who then advise the committee on the appropriateness of the action. I am looking at this and it makes it very clear that, after the decision taken by the Renumeration Committee, you should give advice to the committee on the appropriateness of the action that they have taken. Should you not have advised the committee then that they are going beyond the terms of the Scottish Funding Council and advised him then that you would then have to report that to the Scottish Funding Council, not the responsibility of the board chair to do that. It was your personal responsibility that you paid £116,000 per annum, a significant responsibility to be the Accounting Officer for the college. Why not take that seriously? I am very much taking it seriously. That is why, in my written submission—let me explain it again—I had a long conversation with the chair of the board before I signed any agreement where we went over all the aspects that are pertaining to the decision-making process, and, in particular, the rationale, affordability, etc., of a severance package in excess of the guidelines. It was only when I was satisfied—I have written to that effect—that the Renumeration Committee had covered all the facts, had a business rationale for the decision-making, it was affordable, it had looked at the costs, it had looked at the reserves, the chair of the finance committee was in attendance, that I was satisfied that I had met all the requirements at that stage of the guidance. There was no way, a situation where I was trying to hide anything. I had a long conversation with John Gray and I, and it was only after I was satisfied that everything had been discussed, everything had been realised by the Renumeration Committee and they had a unanimous decision that I then said, well, that is fine, I am now satisfied. What is very clear from this is that you have a personal responsibility. You are the accountable officer, not committee, not board, not federation. You, as the accountable officer, you have a personal responsibility. That is what you are paid for and you did not carry that through by ensuring that the Scottish Funding Council is aware that your board, whom you are the accountable officer, did not meet the Scottish Funding Council. I am sorry, convener. I have just been briefed by the chair of the board that I had a long conversation with the chief executive. I was satisfied that the funding council was aware at the highest level. It is pretty convenient, though, was it not? It is pretty convenient for you not to have to be in the position where you had to advise the Scottish Funding Council that your board was going beyond the terms of the 13 months. It was very convenient personally for you, was it not? I am sorry, the guidance is quite clear. It is clear, yes. The guidance is quite clear. Absolutely. The chair of the board had followed the guidance in contacting Mark Bathill, the chief executive. I am not referring to the guidance, I am referring to the guidance in the SFC that refers to you as the accountable officer. I will speak to Mr Gray later. That is fine. It is the accountable officer's role that you had a personal responsibility for that, I am referring to, not Mr Gray. I considered that responsibility to be met when I was briefed by the chair of the board that he had that conversation and that the funding council was well aware of what they proposed to do. Can I just finally move you to your evidence in the 28th of October, when you referred to the federation action plan? Yes. Yes, and he advises that that was the terms by which the severance package was agreed. I am not sure what you mean. Well, in terms of the minute, you referred to your terms that were set out in the federation action plan, is that correct? My terms, sorry, convener, I am not being obtuse, but my terms of what? Well, the action plan for Lanarkshire. So you advised that in column 41, and again in columns 44, you make reference to the federation action plan for Lanarkshire. In the context of severance packages for the federation? Yes. Oh, absolutely. Yes, so that is a document that has been agreed by all of the federation? Is that something that has been agreed by all of the federation? From memory, from a couple of weeks ago, I am sure that I advised you that in November 2012, South Lanarkshire College had proposed a VS scheme that was based around the Edinburgh model. Clarified proposed. Absolutely. Can I just refresh your memory? It says here that on a federation action plan, a scheme for all staff in all of the four Lanarkshire colleges, and it was intentionally on my board that that plan would be made available to all staff. Yes. So that is the scheme that you enjoyed. Is that the scheme that eventually you took advantage of? Is that correct? I will just finish answering your question. Once South Lanarkshire College had presented a proposal to the principles forum of the federation, it then went, you are quite correct, to the federation board, which consisted of the chairs and principles of the four colleges. The board had not had an action plan, and we were quite rightly getting asked to progress the federation along a more productive line by the funding council. Within that action plan that was tabled to the federation included many things, including the severance package that South Lanarkshire College proposed. It was our intention in Cotebridge to embrace that package for all of the staff in Cotebridge. Were you the person who proposed that particular action plan? No, I did not propose any action plan. I understand that it says here that there are no such plans. This is what we were advised by New College Lanarkshire. The advice is that the document is prepared by Mr Doyle in 2012, so that action plan was prepared by you. That is what the advice is. Right. It was circulated. I understand that they will follow on with the information, but I understand that you circulated the action plan, you were the author of it, and it was circulated to other Lanarkshire principles. No, that is not technically accurate. I am very happy to do so, convener. What happened was that we were at a meeting with the funding council of the Scottish Government, all the chairs, all the principles. John Kemp of the funding council and Linda McTavish advised and cautioned the federation board that there was not enough satisfactory progress on achievements by the federation. It was suggested that we required some sort of action plan. Cotebridge College agreed to produce a draft of that action plan, containing all the various actions from all the four colleges and from the funding council if it was appropriate. Cotebridge produced, excuse me, a draft. Cotebridge was the second project that you were going to do. John Gray, myself, the executive team— No, no, no, but he says here specifically that you were the author of your report. Well, I was not— So is it John Gray now that— No, that is not what I said. Who has heard the document? Myself and the management team in the college. Right, so it is the management team. Well, when you are producing something for other colleges— So that document referred to Severance Arrangements? It would have included a number of things, including Severance Arrangements that were proposed. So how helpful do you think that was that you were the author of your own Severance Arrangements? I mean, is that appropriate? You advise that some makes— I am sorry, I was not the author of my own Severance Arrangements. Well, that is what you said the action plan refers to. The action plan contains many things, convener. Yeah, but it also contains Severance Arrangements. Which was proposed by South Lanarkshire College. Yeah, but I have asked what I am saying here in the one that— You are the author of a report. No, that is not true. That is what the college said. Well, I think— Well, I am going back there and saying it, though. So they align that. I did not suggest that for a moment. Let me clarify quite clearly. We were in a situation with four colleges and a federation. The funding council had advised that we were not making satisfactory progress. They were looking for a smart action plan that took the federation as four individual colleges together to see some collective benefit. There had not been satisfactory progress, according to the funding council. It was agreed that we required an action plan. Coatbridge, I with John Gray said, will produce a draft. Any of the other colleges could have produced a draft. There were many things in that action plan. One of them was a Severance agreement raised by South Lanarkshire College. I did not raise it. I did not recommend it to the federation. We simply included it within the action plan. The action plan then went back as a plan sometime in December, January. You have never agreed. Yes or no? I cannot remember to be honest. Well, it was presented. You presented it to us before you move on to Mary Scanlon. You presented it to us as if this is a deal that I have agreed, because this was the federation model. My Severance arrangements were based on it. It was never formally agreed. Sorry, convener. You are talking to the wrong person. I did not produce the Severance package for myself at all. I had no insight into what was being discussed. You said that you took advantage of that particular. You said that your evidence does not contain it. I did not say that I took advantage of... You said that that was the basis of what your arrangement was. The representations that were made on your behalf were the same, so there were two Severance packages. You was one of them and took advantage of that. What was the other one? I did not, but I have seen that in official reports. It was not that there are two Severance packages. You said that there were two Severance packages on the go, and that is why you had to... No, I am sorry for saying that there were two Lee Sellers packages.which is the other seventh package that was on the doors, you see? You refer to them in the official report. I have no recollection of another seventh package, apart from the end remod. You said that the bigot bailey had to be brought in because there was two packages, there were two proposals on the table at the time, and that is why the bigot bailey had to be brought in to advise the board. Sorry, you are talking eight months, nine months later than Jack, well, sorry, forgive me, nine months later in September new college, Lanarkshire, which were perfectly Felly, Cymru wedi chi'n gbiwyddu ddiwedd nesaf i ni oedd credu i wneud unrhyw i wneud nesaf i ni oedd deseru'r cw Cisco a'r moysgolion, i nhw'n gallu gallu eich gweithio. 28猴 oed, oedd y bobl 5 a 12, rydyn ni'n beth ddaglus o'r gweithgau sy'n ddydaug i describes only in September when there were two packages, and it was the federation that flew there south of Lanarkshire. Sorry, Convenor, the fact is that I did not take advantage of anything—I did not propose any aspect of my Severance package. That is the one that you benefited from it. I would have benefited from it, but I did not propose it. I appreciate that, but at the very end the decision was to agree to that package, is that correct? Based on that model? I presume based on that model, that's what the chair has said. Mr Gray, did I hear you correctly in your opening statement when you said that John Doyle had never asked for a severance package? Did you never discuss a severance package with John Doyle prior to the remuneration committee deliberations on 28 January? No. You never discussed it? No. Right, okay. Well, I have a letter here and the information is coming in by the hour. Now it's from you, Mr Gray, and it's to the members of the remuneration committee. Having talked to John at some length, it's now clear that John's position in Lanarkshire is becoming even more difficult. We should now agree a severance package with him on that basis. You propose a pay increase of 6 per cent and you're happy to recommend an arrangement based on two years gross salary, which you would certainly not consider unreasonable. You go on to say, I believe that this will allow the board, the staff and the students to celebrate John's worth and success and it would allow them to go out on a high without being picked over. So you wrote that to six members of the remuneration committee. We have the evidence here today and I thought I was hearing things when I heard you say, John had never asked for a severance package. It hadn't been discussed and you openly admit here in asking for a remuneration to agree to this to have a meeting that you've talked with John at some length. But not about a severance package. But not about a severance package. It's absolutely not in that letter. What would talk to John about him leaving the college under the circumstances that were on the table? That was my duty to talk to him about his future with the college and that's exactly what that letter says. I talked to him about his future. Right, so he, John, now believes the best way forward for all concerned and bearing in mind that there will be only one principal's job that we should now agree a severance package with him. So your adamant, despite everything that you say in this letter, you never ever discussed a severance package with John Doyle. Correct. Right. So who did you discuss the 6% increase in pay, the two years gross salary, the two years gross salary, there was also the pension which, 90,000 which you decided in hindsight not to pay. Did you just come up with all that on your own? We discussed it with the remuneration committee. This is when you're asking the remuneration. This is your letter to the remuneration committee asking for a meeting. And you even give your home phone number and if you're happy with the proposal that we offer John voluntary service as outlined above, I will of course ask Lorraine to convene a remuneration committee meeting. So that was the one in the 28th of January. This is your invitation to the meeting that resulted in John Doyle getting 304,000 well over the recommended guidance by the Scottish Funding Council. This is your letter to the remuneration committee to ask them to come to a meeting. And you've put in here the exact terms which are no mention of SFC guidance or any others. SFC guidance were available to all members of the remuneration committee. You never told them that. They didn't do their homework like the people should do. Well, you're the prince, you're the chairman. You've written a lengthy letter here. Why didn't you mention the SFC guidance? You say that you'd looked at the Edinburgh model. Why didn't you mention that it was well over twice the funding council guidance? And before I come to my other questions, we also have a letter from the six members of the remuneration committee. Happy to read out the names, but I think that you're familiar with them. At the 28th of January remuneration committee, the SFC guidance was not given to us at the meeting, nor were we signposted to it during or after the meeting. There was no mention of it in the notes of the meeting, and there's no mention of consideration of SFC guidance in any notes. You misled, in my view, the remuneration committee. They did not know anything of the guidance. They thought what they were signing up to in your letter to let John go out on a high and celebrate his worth. They thought they were signing up to something that was statutorily acceptable and accurate. Is that correct? Well, they did not read the papers that were prepared for that meeting then. Those papers were circulated to them on the internet, which is the way that we do our board papers and our committee papers. That was in that circulation. They did not read what was in front of them. Well, why didn't they? They were provided with that information. Okay. They weren't provided with it. It was in their computers on their laptop. There are six members here. They have written to us on 24 November. They were not provided. They can't all be wrong. One might have had a relapse of memory. They can't all be wrong. It was in the papers circulated to them before the meeting. It wasn't in the papers circulated. The papers circulated to the meeting are on the board internet, and that's the way that we circulated papers. We didn't provide piles of copies. It was all on their laptops. It was not where we signposted. Okay, that's that. I'm asking John Gray. Of course, of course. Give you a chance in a minute. They can't all be wrong. So are they all lying? Did they all come along here and lie to us? No, I don't think they did. I think what they... Well, somebody's wrong. It's either the Immuneration Committee. None of them were signposted. None of them knew anything about the SFC guidance, which was far, far less generous to Mr Doyle than your recommendation, but you say they did. So someone's wrong. Is it the six members of the Immuneration Committee or is it you? Well, you can blame me for perhaps chairing a poor meeting. But they had the papers in front of them. Well, I can also blame you. If they chose not to read them, that's their business. Right. So you come up with a 6 per cent pay increase, two-year salary, which is even more than any Edinburgh model. Who did you discuss? How did you come up with this very generous severance package for John Doyle? Who did you discuss that with if it wasn't John Doyle, despite your talk to John at length? So what did you talk to John at length about because his position in Lanarkshire was coming more difficult? If it wasn't a severance package, what was your long talk to him about? Because this letter is all about the severance package? I talked to John about lots of things about the business of the college. Why is your opening statement having talked to John about some lengths and you go on and recommend the severance package? Well, the severance package information was based on, as you've heard as many times, on the package that was at that stage, as we understood it, the Edinburgh package, what people in Edinburgh were offered and got. It was tabled by South Lanarkshire College as a proposal, agreed a proposal, that that's what should happen to the four Lanarkshire colleges. And at that point in time, that's when we were talking and meeting. You can say erroneously, if you like, we thought that that's what was going to prevail and that we were happy and the board was happy and the remuneration was happy to give John that offer. He did not concoct that offer himself in any way, shape or form. If I got information, it sent it in and came off the top of my head. It would come from the HR director who knew and was familiar with all of these sort of schemes that were around the place and being talked about at the time. That's where the information would come from. Okay, well in the same letter, which was all about severance package, you start off by saying you've talked to John at some length. So we'll leave it there, we have the evidence here and that's for our report and for others to look over. So can I just ask, did you say to the remuneration committee that the SFC had any objections or did they have no objections to what was being proposed? What did you tell them? What I discussed with Mark Bathill was— No, I'm asking what you discussed with the remuneration committee. What did you tell them? In relation to the Scottish Funding Council guidance, which you knew all about but they didn't. So did you tell them that the Scottish Funding Council had no objections to your generous offer to John Doyle, to celebrate his worth? What we talked about there was my discussion with Mark Bathill, which made clear that if we wished to pay more than the guideline, we were responsible for the additional cost ourselves in the college. So did Mark Bathill say that it's fine to give him a 6 per cent pay rise? It's fine to pay 21 months plus 3 months plus an extra six months. Did Mark Bathill say that that was fine? Did he endorse that? It was in the discussion that I had with him. Did he endorse it? I just hang on a second. I said at the very beginning that the six months payment in lieu of notices has nothing to do with this discussion. It's entirely a contractual matter. John had a contract that said that in it, so I wish he wouldn't keep putting it all together. It's in your letter here. It's an auditor general report. We would be failing in our duty as a public audit committee if we weren't doing our job robustly here. My second question is for John Doyle. As the accountable officer, why didn't you inform the internal auditor or instruct the internal auditor to be informed about the severance arrangements and payments until an informal meeting on 28 October, eight months after you got your signed bit of paper from the January meeting? I spoke, as you have seen from my written submission to John Gray the next day after the enumeration committee. We discussed the role of the internal auditors. I was aware that the internal auditors would, as always, the dialogue would be between the chair of the audit committee and the internal auditors. The internal auditors, as everyone in this room is aware, are appointed by the board and the general report to the audit committee. My understanding of the internal audit committee is a separate function from the executive, but it is supported by the executive. I really don't want a big lecture about the internal audit committee. I only want to know, as accountable officer, why didn't you ensure that an external audit was aware of your severance package? Why didn't you do that? I am absolutely convinced that the internal auditor was aware of a severance package. It is interesting that the only two people that have not been interviewed by the audit committee are the two internal auditors themselves. I was well aware— I was well aware— See, you got that wrong. We actually call for evidence from the internal audit. However, the internal auditors for Copebridge College did not appear here. There was one of the partners who did not engage. We actually had both. With two internal auditors, we can clarify that later. I had not met, to my knowledge, the chap who appeared. I think that you are just about to get some— The point is that I am just coming on to my final question, but it was your responsibility as a counterpart. I am going to explain— It is an important point. I am going to explain in detail— Can you give us an answer? Yes, as soon as the convener is quite happy that the two internal auditors who I engage with at Copebridge and the board— Mr Toyle, just to clarify, we ask the questions and you answer the questions. Well, I am happy to do so, sir. I will come back to you about that later, after this meeting. I will clarify for the record. My understanding was— You can please answer the questions. I would be delighted to. My understanding was that, in January, the internal auditors were engaged with the college as part of the merger programme. I was also aware that the internal auditors were engaged with the Audit Committee, chair by Tom Keenan, in terms of the annual audit programme. I was also very much aware that the internal auditors, with Scott McReeff, who you all found about a couple of weeks ago, had done an extensive due diligence, which front centre of that was Severance Package. It was my clear understanding, right through that period from January, that the internal auditors were not only aware but had been engaging in various forms about Severance Packages. If I may, it was also my understanding that Scott McReeff, who did that due diligence, would have been liaising directly with the internal auditors on the action plan. They cannot produce a due diligence report for merger without talking to the internal auditors on what has been progressing within the college. You are quite right. The very last thing that I did in closing down was to meet with the internal auditors just before I left. That was on the basis of that I was not happy that Scott McReeff had been advised that he had put all the costs of the Severance Package of all the executive team, including all the on-course, without the SFC contribution. I raised that with them. They were well aware, Mr Scanlon, of the internal audit. If I may, I will refer you to Mr Brown, who said that the internal auditors were well aware of the Severance Package. He had spoken to either Mr Gray or Mr Keenan. I spoke to Mr Gray, and Mr Gray confirmed that he did not speak to the internal auditors, which meant that, as one would imagine, the chair of the audit committee spoke to the internal auditors. I was aware that the internal auditors had been engaged in the process since January, all the way through. It is incorrect to say that I did not engage or in some way held the information back from them. That is not correct. It has taken you a very long time and a lot of our time to talk all around the awareness and the engagement, but you still have not answered the question that, as accountable officer, you used your responsibility and notified and informed the internal and external auditors. Expecting them to be aware and be engaged in all around the shop, the responsibility was yours and Audit Scotland, the internal and external auditors, were not aware of your severance payments. I will leave it to you. I think that there is something far wrong there, Mrs Scanlon, if the internal auditors having gone through a programme in January, right through to October, having engaged with the chair of the audit committee throughout the summer and beyond, hadn't they got the audit? The internal auditors, my understanding is, have got a clear duty to protect the board. They were well aware that we were going through a merge of programme. They had carried out the similar work with new college, Lanarkshire, Motherwell and Cumbernauld, so it is absolutely erroneous to say— You were well aware that you should have told them. I was well aware that they were aware. There was no point in writing separately if they were aware. When you were giving evidence in 28 October, we heard from you that your decision or the events leading up to your decision to leave were a result of a discussion with a representative of the Scottish Government and the Scottish Funding Council. To quote you, everyone in this room understands the language of power. When you were invited by the Scottish Government and the Funding Council to discuss you leaving early, you know that your position is untenable. Now that was, I think, correct me if I'm wrong, in August. It would have been in August, yes. That was me leaving early, not leaving, yes. On 28 January, the chair presented a letter outlining your position at that point and the package that was around that. Is that not sort of contradict? Not at all. In the context that there can only be one principle when there is a merger, there were three colleges merging. The chair of the board and the board had obviously decided that they would produce a sevens package if required for me. At that point, there were no structures, there were no interviews, there were no interviews on the horizon. So I, after discussion with the chair of the board as per the SFC guidance, agreed that I would accept that offer. It wasn't until mid July when the Scottish Government rep and Linda McTavish came to the college and presented, as I've written to you and written evidence on Monday, came to the college and presented the terms and conditions for a merger with what was going to be new college Lanarkshire and contained within that was the fact that I couldn't apply for the job because the job had been given to Mark McGuire. And I've made that very clear over a number of correspondence with this committee. Well, clearly the job was given to someone else because Coatbridge College withdrew from the merger at a critical point. Yes. Can I just come back to the letter that you were issued with I think on the 29th of January? Was there a termination date on that letter? I haven't looked at it for a couple of years. My understanding is that it was what I would call an enabling agreement in the context of if the date changed and forgive me if I get this wrong whether it was March 31 of July, I can't remember now, that it would allow me to progress. So, if there was a delay in the vesting days, as it's called, the letter would still be intact. So, I think that it was a continuation date. I don't think that it was a fixed date in it. I mean, other— That may be wrong on that. I haven't looked at it for a couple of years. Other senior members received offer letters that had a termination date of 31 July, and I'm asking, did yours have that same termination date? From memory, it is 31 July, but I don't want to say and get the words wrong, so if I get the words slightly wrong, but the message from my understanding is, although it's easy enough to check. Have you got a copy of my letter there? I don't have a copy of your letter. Right. Well, okay. It would have been helpful then, because— It would have been. It would have been. Well, if somebody had asked me around, I would have provided a copy of it. I can send a copy this afternoon to the clap to the board. I'm sure that I've got it in file somewhere. However, to answer your question, Mr Beattie, to answer your question, my understanding that it wasn't a fixed date, it was a date about vesting day, but with agreement by the board, it could be later. I get a bit confused with some of the terminology used here. I hear that the offer has been referred to as comfort letters. You're talking about now as enabling letters? No, I'm sorry. I didn't mean it to be an enabling letter. I meant that it was within there a flexible date from memory, but I'm happy to send the clap to the board this afternoon a copy of my letter. I thought that you had a copy of it. Can I also address the comfort letter? The comfort letter term came from not from the board of management, I'm sure, but from the fact that people took some comfort in the fact that they had something that enabled them to forget what would happen if they weren't part of the college going forward and get on with the job of moving the college forward towards Merger and for the cohort of students that were studying with us. If that helps, that was what I think people meant by a comfort letter or a letter of comfort. Can I come back to something that you discussed a little while ago, which is in connection with the financial cost of the settlement? You're the accountable officer. Did you discuss with the director of finance the affordability of the package? I spoke to the banks of the director of finance after the 29th. It could have been the same date, it could have been a couple of days later. It was on and around. We had a financial forecast return for the nine years that I was the accountable officer. We had a very accurate financial forecast return. We were never below it. If we were anything, we were above it. We had nine years of suplices. So we spoke in the context of getting our figures right. I explained the conversation that I had with the chair of the board. But you spoke to him about the sevens package directly? I did. In the detail, I have been agreed by the new relation committee that the chair of the finance committee, Paul Gilliver, would have an on-going dialogue with the director of finance about affordability. I understand, both from Paul later on and from Derek, that's exactly what happened. That's not clear from the evidence given by Paul Brown. As the accountable officer, you have a responsibility, along with the director of finance, to ensure that it's affordable and that the college can meet that financial obligation. Clearly, the college couldn't. Because at the end of the financial year, the college ended up with a million-pound deficit. And they quote partly due to the sevens arrangement. I don't understand how, because if we look at the financial forecast return, you heard a brief from the director of finance here, I think it was last week, that we had, or he had, included that cost within the forecast. I left on 31 October. On 31 October, the academic financial year had just begun. We were forecasting a small surplus. We had never been in deficit since I took over in nine years. I have no idea why we went from a forecast return to a million pounds in debt. It was a sevens package. No, I'm sorry. That was not the case. I haven't looked at the account. The last set of accounts I looked at for 12.13 were when I was the accountable officer and they were, as the previous eight years, in first-class order. I have no idea. You would need to ask in detail New College Lanarkshire, who took over. So you're saying it happened after year of time? Absolutely. Can I ask you about Bigot Bailey and the remit that they had? They do not seem to agree the remit that you indicated during your previous evidence. They seem to believe that they were looking at a very narrow area and they also said that they were not providing any clerking or other support to the remuneration committee. Yes, I'm happy to clarify that. It goes back to what I said in my statements to the committee in that I had made an introductory phone call to Paul Brown, which he confirmed. I had conveyed that the chair would wish to speak to him and it's a matter of wording. I had said that I was looking because the clerk to the board was ill for secretariat support. I had said to my senior team that it would be secretariat support. What transpired was that it was admin support and Paul Brown confirmed that. It was on the basis that, after I had made the introductory phone call, I had no engagement at all. Normally, if you were discussing something with consultants or lawyers, you'd be there and you'd be engaged and you'd follow up. But because I had only made the introductory phone call and Paul Brown confirmed several times to the committee, my engagement was that the chair is going to give you a call or can you phone the chair? It's about and we're looking for two things. One of them was, I didn't think that such a narrow remit was to look at all of, as he confirmed last week, all of the processes, documentation and approach by the board on the sevens package. He didn't see all the documentation. Sorry? He didn't see all the documentation, he made that clear at the... I'm sorry, I thought he made it very clear that he'd seen all the documentation. What documentation, Mr Beattie, did he not see? Well, as far as we can understand, he didn't, for example, see the offer letter to yourself. That's right. The offer letter, I don't understand, is a copy in my personal file. Surely the external auditor had a copy of that? I mean, I don't understand, it's not a secret. The auditors, we've been through that area before, but the auditors clearly said that they had no access to that and they did not see that until much later. But coming back to the question of the role of Bigot Belly and the scope of what they were looking at, it does seem to be a very narrow area. I'm not sure what you mean by narrow and how you define narrow in the context of what's missing that you think should have been there. Well, I think that Bigot Belly quite clearly did not see all the documentation. They acted on the basis of what they were informed was the situation and commented on that. I watched it and read the transcript. They were quite clear that any information that they had asked for, they received, with the exception of the Severans letter dated 28, 29 January. That was my understanding. If there's something that I'm wrong on, please tell me. I think that there's probably a little bit of a different self. No, I'm happy to. It's a very important point. So if you think that there's something missing that Paul Brown didn't get or didn't look at. Probably the critical thing was the letter, the offer letter to yourself. And again, I would say that it was a letter that I thought was in your domain. It was a letter that's in my personal file. It's a letter that Mr Brown was happy about not seeing, but I'm happy, very happy to provide the claps board with a copy of that if you don't have it. I think that that would be useful. I'm very happy. Actually, can I just finish by saying that I thought that you'd asked for it last week and that you would have got that from new college Lanarkshire. I'm sorry, if I'd thought that you'd difficult to getting a hold of from new college Lanarkshire, I'd have sent it off to the clap. By a couple of matters for the record, firstly, Mr Doyle, can you confirm that you received an offer letter on 29 January 2013 from Mr Gray? That's the one that we're talking about with Mr Beanie, yes. Yes. Can you confirm, as a countable officer, that you did not speak or contact the Scottish Funding Council in any way regarding that letter thereafter? In the context, as I've explained. Yes, but no, it will be good enough. No, I didn't on the basis of what I've explained. Thank you. Could you then confirm that, as a countable officer, you did not contact the internal auditor after the 29 January 2013 regarding, again, the same letter? Could you repeat that question, sorry? Can you confirm that you did not contact the internal auditor after you received that letter on 29 January 2013? Yes, or no, it will be good enough. Yes, I had spoken to the internal auditor, and I spoke to him personally in October. Did you speak to him, yes or no, after the 29 January? No, I didn't speak directly. So the first time you spoke to him was in October? Directly about the subject, although I was... That's fine, thank you. That's not a record. Well, I think for the record, it's important, it's well aware. Can I move on to that? No, you've given me an answer to the question, I'm very grateful for that. Do you recognise that the Scottish Funding Council's guidance includes the requirement for a business case? It mentions the business case, yes. Do you recognise that it includes a requirement for a business case, Mr Doyle? Yes. Thank you. Was there a business case for your sevens payment? My understanding was that there was a business case. Where is it? I haven't got, as I've explained, I haven't got any documentation. So you don't have it, and you never saw it? The business case was explained to me by the chair of the board who discussed it with the Renumeration Committee. But there's no document, you can point the committee to which illustrates that business case. Well, I wouldn't have any documentation for that. So you couldn't present that to the auditor when you met him in October to discuss this matter? The internal auditor? Correct. When I met the internal auditor... Can you just ask the question, did you give the internal auditor a business case in October for your sevens package? I didn't have the business case from the Renumeration Committee. So you recognise the guidance said, you as a accountable officer had to make sure that the funding council that was a business case and that did not happen. The business case in the context that we're talking about was on the Renumeration Committee discussion and contained within the letter and the detail of that. My understanding, the sevens letter, it includes a rationale for it. That's not what I'm asking. You said earlier on to the convener that you're very clear about this guidance, the funding council issues, therefore know what a business case you're a very experienced principal, or were a very experienced principal. You're now saying there was a rationale, that's not a business case, Mr Doyle, is it? When I spoke to the chair on the 29th... I don't care about what you spoke, can you answer the question, was that a business case or not? I understood it was a business case. You understood, but you can't give us any indication of where it is or if it exists, other than in a paragraph in a letter in your letter. That's what you think is the business case. No, I'm sorry, Mr Scott, I didn't say that. When I spoke to Mr Gray the day after the Numeration Committee, I asked about the affordability, accountability in the context of a business case, they said that they'd covered all of that, that I didn't get a copy of that business case from... But it doesn't exist, Mr Doyle. It doesn't exist, the minutes don't reflect that. As you've seen in the minutes, you know that it doesn't reflect that. Well, Mr Brown said that there was a business case. And he couldn't give us it either. Oh, right. Okay, so why did he say that it was a business case? Could you stop asking questions? You're here to answer questions, sir. I'm sorry. Okay? I'm sorry. There's no business case, correct? You're the countable officer, you failed to alert the funding council, you failed to alert the internal auditor, and you failed to ensure there's a business case. Is that not clear failings? No, I'm sorry, Mr Scott, I disagree. The funding council were aware there was no need for me to make them aware because they care. Yes, there is, because it's in the guidance that you claim to know about. There is an absolute requirement on you as a countable officer to make the funding council aware of the letter you got on 29 January with your severance payment in it, £304,000 of public money. It should have... You should have then phoned the funding council or contacted them to say that letter had been received, shouldn't you? That's what the guidance says. No, my understanding was that that was... that was taken care of by the long conversation that John Gray had with Mark Batham. You can understand all you like. Read the guidance, Mr Doyle. It is very clear what it says. Isn't it? Well, I haven't read the guidance for a while, but if you say that... I have no further questions. Yes, I have to say, having served on a university court for nine years and chaired a charity as well, I'm interested in the charitable side of this. Were you both trustees in that respect in the charitable side? Did you act as... You were acting as trustees of the Co-Bridge charity as well as both of you? Were both of you? Directors, all the directors of college boards were by definition trustees of the charity. Each college is a charity. So were all trustees? Did the board at any point have a discussion about the charitable side of these significant payments being made? No. You're shaking your head, but we need it on verb for the record. Mr Doyle, no? No. No, so there was no discussion of the effect of your responsibilities as trustees in relation to the charity. I want to go back to this letter, this meeting of the 28th and the letter of the 29th. I have to say, in my experience, I have never ever heard of a major decision being communicated to the individual who is affected by that decision within 24 hours of a committee without the committee actually approving the minutes. I find that really quite interesting and I'd like to know from you, Mr Gray, as to why you felt it necessary without the committee actually approving those minutes. You'll remember that there was some dispute about them when it came to the 23rd of October, that you actually felt it necessary to rush that into a letter, which we haven't seen, of course, but the severance letter to Mr Doyle and get his reply well will come to Mr Doyle's response. But you sent that letter within 24 hours of the meeting. Why? Each time I visit the college, it involves me in 130 miles roundtrip. I happened to be in Coatbridge the following day, following the committee meeting. The letter was there. It had to be signed by me, so I signed it. It wasn't done because it was just the next day or there was no haste involved necessarily. It was a convenience for me to be there at the time and I signed it on that basis. The dispute about the discussion at the remuneration committee concerned not John Doyle's package, but the package that might have prevailed for senior managers, which at the end of the day did not prevail and was withdrawn. The remuneration committee, as far as I am concerned, in the minutes and in future meetings, were content with the amount that John Doyle was to be paid. By the way, 40 per cent of that goes straight back into the public purse via the land revenue. I don't think that's particularly relevant. Maybe not. Immediately after the meeting on the 28th, you dictated a letter that was then typed up and you signed it the next day because you happened to be in. You didn't think that this was such an important decision that you should actually get the minutes signed off before proceeding with such a major decision that was outwith the guidance that you were aware of on the Scottish funding council? I had the verbal agreement of the remuneration committee that they were happy with what was being offered to John. And did you have the agreement of the funding council? The funding council previously, in my meeting with Mark Vath as I said earlier, we discussed the guideline and his advice to me was that if you guys want to pay more, and this is relevant to other colleges as well, if you want to pay more, be clear that we will only refund you the guideline amount. Right, but there was no objection for Mr Rathrow that you were paying. No, there was no red line. Okay, that's fine. The other bit of that is that the additional money being paid out in the severance letter, Mr Brown told us that when he drafted the severance agreement, which he apparently must have, I presume, he did on your instructions, he claims that he hadn't actually seen the severance letter. I can't answer that. Where the business case to which Tavish Scott, my colleague referred, that business case was presented to the remuneration committee? I get a bit thrown by this business case question. There isn't a piece of paper that says business case at the top of it. I think that we discussed the implications in a business fashion as to what was being offered, what the implications were, etc., and what the justifications were. Under the Nolan guidance, I mean far less the Scottish funding council guidance, I mean Nolan was set up because of scandals in relation to various things occurring within businesses over the years. And Nolan said that if you actually were going to make significant payments to someone, you had got to present a business case to justify that. Now that's Nolan. Scottish funding council creates it very clear that you were required to do that. And the Oscar charitable guidance makes it very clear that if you're spending charitable funds, which you were, then you are required to actually present a comprehensive case as to why you're doing this. Because you're required to justify to the public and to Oscar the use of public money, far less to us and to the taxpayers. So on every issue where the requirements were there, you, as an experienced person, on a senior CV, very experienced individual in business, you were not aware that you were required not to produce a rationale or some discussion about it, but you were required to produce a firm business case. And you didn't do so. Correct. Okay, that's fine. And Mr Doyle, as the accounting officer, accountable officer, you were also required to ensure in terms of those three elements that I've just mentioned, you were required to produce a firm business case for any significant expenditure within the college that was out with normal guidance and you did not do so. That's correct. Thank you. Okay, well that makes that all very, very clear. Thank you. I'm very grateful that we've now established that there is no piece of paper with business case written at the top of it. That's very helpful. I'd like to come back, Mr Gray, to your comments about the, that your proposal in that email to the committee, the remuneration committee, before they had the meeting in January, where you suggested terms which clearly were very generous and may well have reflected your own view about what Mr Doyle had done. I'd like to return to the question now, perhaps you've had a little while to think about it, about who did you discuss that with before you actually came up with those terms which we've just heard about? Well, the terms are based on, as we've said several times, what was initially called the Edinburgh case, and then the proposal that went to the Federation Board of Lanarkshire Colleges, that was entirely an independent proposal that, as far as, quote, bridge was concerned, we felt capable. We thought that's what the game plan was for the sector at that time. That's what we decided to go with, and that's what John Doyle got offered. Yes, but I'm glad to work out who the we was before you wrote that, that's what your colleagues said. All of it? Was it just you, or who did you discuss it? It's certainly not just me. I'm not the fount of all wisdom. The HR director would be involved, and I can't say for certain, because I can't remember all the details of the discussions that go on roundabout these subjects because you talk to people all the time about things. I'm pretty sure that I would mention it and discuss it with members of the remuneration committee, but I can't prove that. So your proposal to them, ahead of the suggestion that there should be a meeting to agree it, would already have been discussed with, for example, at least the HR director? Yes, I would say so. Yes, definitely. If we then go to the meeting in January, you have just told us quite animatedly that the members of the committee didn't do their homework if they didn't know about the guidance from the SFC. Would it not be your job as the chair of that meeting, never mind the chair of the board, to make sure that that discussion is held? And therefore to raise the issues rather than just to go down one tack? I think clearly with the hindsight and what was said and what was minited, I did not draw that to the attention of the committee. That can be a failure in my part as chair and a poor performance in my part, but there's certainly no intent behind that. No, okay. So we could reasonably draw the conclusion that the discussion at that remuneration committee was around your proposal. I take the point that it was not specifically about Mr Doyle, but it was senior management in general, I think I've heard that. But it is perfectly reasonable to draw the conclusion that there was no comment whatsoever about the SFC guidelines. Obviously not at the meeting because the minutes are quite clear about that, but it doesn't mean to say that the committee were not aware of that because they had that in their papers for the meeting. I didn't draw the attention to it, but it was there at the care to read the papers, which I would assume committees generally do read the papers to get presented with. Yes, some of us do, clearly some don't, but that may be... What was the purpose then of a conversation with Mark Barthow shortly beforehand if what he said was not going to be taken into account? I think the discussion with Mark Barthow was to try and fulfil our obligations in terms of making sure that the funding council knew what we were doing, which I think is part of what you're all talking about. And as far as I'm concerned, I saw him and I know him of old. I've known him for a long time. We had a very level discussion. He laid out what the score was and I told him what we were proposing. And he said, well, that's up to you if you want to do that. That's... But you have to meet the cost. Indeed. Okay, we've then just had a discussion about the letter which followed very shortly after which Mr Doyle was given and signed. We've had some helpful discussion about whether there might have been a date on it, which is news this morning. My understanding from previous evidence is that any letters that were sent to other senior managers, no doubt just a little bit later, included the same severance date of around the 31st of July. I think that's the date we're working on. What I'd like to understand is why it is that, in Mr Doyle's case, that seemed to matter, sorry, not to matter because Mr Brown came to the conclusion that your agreement had to be honoured, whereas other senior managers who must have received very similar letters with the same severance date could have their offer withdrawn. What's the difference between those two offers, please? I can't say that they're different, but I can tell you the facts behind the offers to the senior managers being withdrawn because I was involved in that. Well okay, I guess my question is not directly that, but what's the difference between that and Mr Doyle's position when he would have apparently been sent a similar letter and similar terms? All I can say is that Mr Doyle's offer stood for whatever reason. I think that the board were happy with it. As I've said in my opening remarks, nobody ever questioned the value of that package, guidelines or no guidelines, and nobody suggested at any point that it should be stopped, withdrawn, adjusted or amended. They were all content to sign on to that agreement and for it to proceed. Which of you then decided that on 11 October we'd have to get a settlement agreement signed so that Mr Brown knew that it was a ffeta comply? I'm not sure that's entirely accurate, Mr Donne. I was given, as Mr Brown has said, I was working my notice at that point. I had a couple of weeks to go. There was a pay-run due. I had to sign a settlement agreement, which had to go to the lawyer. There was due process taking place. As an employee, I was leaving in a matter of weeks. I was given a letter and a settlement agreement to pass through my lawyer, which I did. And I signed that roughly about 10 October, a couple of weeks before I was due to go. That would coincidentally be the point at which Mr Brown is engaged to make sure that the board gets the advice that this contract is different. Mr Brown was engaged by the chair and the board on the basis that we had received communication from the funding council and Scottish Government about, as Mr Martin had said, at that point, 27 schemes being in existence. I'm just, it's regarding the meeting on the 28th of January, now, once again. In terms of the papers that we have received, certainly for this meeting, there's the letter that we received signed by the former Co-Predist Immunisation Committee members. In that letter, it states that, regarding the paperwork that was available for the committee, it states that the email link took members to a specific part of the internet where the associated papers and documents were located and was not focused on any other part of the site unless specifically directed to go there. On some occasions, the documents were attached to the email message for convenience. I'm also going to say that it was never intended to use internet as the means of communication of important information or to replace raising issues in discussion at meetings held in the college but as a means of quickly and efficiently disseminating documents for discussion at the appropriate meeting. Regarding the information concerning the SFC guidance, clearly, as we've heard today, and also in the minutes regarding that meeting, there is no reference to the guidance in the minutes. And certainly from what we've heard today, it wasn't discussed at that particular meeting. And as you said as well today, Mr Gray, that in terms of members of the committee, if they didn't look at all the paperwork, then obviously that's their responsibility and not so much yourselves. However, on an issue of such importance, would not have been the beneficial and essential, some would argue, for reference to the SFC guidelines to have been clearly stated in the minutes that were issued to all of the remuneration committee members as compared to that information just being on the internet and expecting members to go and search for it themselves? The internet, can I just clarify that? For quite a long time, we introduced the iPad and the internet as a means of communicating papers to the board members. So, for every board meeting, the papers were circulated on that net, on that weight. We did that to cut down costs. We saved £7,500 a year by not having to churn out piles of paperwork that we sent round to all the board members. So, the process of using the computer and the internet is an integral part of the board process. Just leave it at that. You are quite right. I did not specifically point the committee at the SFC guideline. Could I just fast forward a bit if this is answering the question? Okay, and then we may come back, okay? At the point in time when we had the 23rd of October minutes of the remuneration committee and the board, all of that was absolutely abundantly clear to everybody around the table. What the limitations were, what the implications were, and nobody demerged from that. As far as I'm concerned, at that point, okay, it's a bit after the original offers and all that sort of stuff, but time moves on. And what, as far as I'm concerned, is important, is what the final situation was for everybody. And we know that the senior managers were happy, well, I'm not saying they were happy, but they withdrew their requirement and were happy to go along with the single scheme for Lanarkshire colleges. And John was happy to go along with his thing, when you might say why not. But nobody demerged from that agreement or questioned it or in the light of all the guidelines and everything else that was on the table at that time. Right, okay. We'll go back to the 28th, because clearly, also, there was no link provided to the guidelines to the members. And also, the guidelines have been there since the year 2000. And in terms of, I mean, the use of iPads and laptops and all that in the internet system, then also there will have been, I imagine, a fair amount of paperwork allocated for that particular meeting. Now, surely, it would have been advantageous for all concerned if specific points and specific areas would have been highlighted or links would have been provided prior to the meeting when the minutes or when the agenda and papers were being issued, so that all members could easily have access to that particular piece of information as compared to the expectation that they will have actually, they will go and look for it in themselves. Bearing in mind also that these were busy people as well, and they may not have had the time to actually go and attempt to search for that particular information. Well, that's a statement of the obvious, quite frankly, that had it been spelled out in words of one syllable that would have been a lot clearer. I think that that's unfair, because certainly, as a member of this committee and a member of this Parliament, we receive a huge amount of paperwork, a huge amount of information, particularly regarding this inquiry that we are undertaking. I mean that you can see, that's just some of the paperwork that we have actually received for this, and it can be advantageous if specific points and specific paperwork is actually highlighted that ensures that we, as members of this committee, would go and look at it, and I would imagine for other committees in this Parliament, also outside of this Parliament, for people to be directed to make sure that that is an important piece of information, make sure that you look at that. I accept the comment, clearly, but some people are more thorough than others, and maybe we should play to the lowest common denominator, which is to spell it all out in piles of paperwork. I'm happy to admit that I did not spell out the guidelines at that remuneration committee meeting, and I think that looking back, that's something that should have been done, and I didn't do it, but I think that, to me, in the fullness of time, it all got overtaken by events. I regret that that meeting could have been better, but following meetings were better, and everybody understood what all the rules were. Secondly, in terms of the actual package, that was discussed on the 28th, and the signing off of that package on the 29th. I'm just to be clear on this, but was that package designed because, at that particular point in time, Coatbridge College was in the merger discussions, and the college then came out of those discussions later on. So, if that was the case, then surely that package should have been withdrawn, and then a separate or a different service package then issued. I don't think that it's black and white, and why does that have to be perfectly honest? I think that there was the activity between the merger process and Coatbridge being in and out, and in and out as you've rightly identified. The whole of that process was part of the merger activity. We were trying desperately to make sure that Coatbridge got proper representation in the merger. We weren't getting any satisfaction in that because we were being told by Motherwell and Cumbernauld once they had merged. Well, if you want any, you do what we tell you, and you'll take what you get. That was basically the thing. So there was a lot of heat and anxiety, particularly in my part, to make sure that the staff at Coatbridge College got proper representation. I think that looking back over the whole period, sure, things could have been handled differently. Papers could have been more freely available, et cetera, but it doesn't mean to say that people did not know what was going on. I have just one final question. It's on the business case situation. We're aware of Mr Doyle offering an 18-month service package in February 2013 to a member of staff in his office without a business case. I'm without the authority to do so. Was it common practice for sevens packages or enhanced packages to be offered to people without business cases? Because that's nine or two examples. What actually happened was that the member of staff post was associated with mine. After I had received the offer from the board, and the basis that my post, if we merds, was going to be lost, I looked at the member staff's contract, which was a separate contract, and I produced a short business case that was put in their file, which gave the rationale and the costs, et cetera, for that business case. What should have happened, as you've heard from Mrs Docherty, the chair of the HR Committee of the board was that it was standard operating procedure that I would not only brief the board on any aspect of attaining to that, which I fully intended to do. Unfortunately, I had a very severe accident in May with a lot of facial reconstruction, and I was offered a considerable period of time. I missed that set of committee meetings, and that didn't happen, and I take full responsibility for missing that link in the chain. It wasn't deliberate. It was on the basis of best employment practice, and, as I say, it would have normally been picked up, as Mrs Docherty has explained, in the HR Committee cycle. However, I was very ill at the time. Can I go back to Richard Simpson's earlier point about the charitable stage of Coatbridge College and both you and Mr Gray being trustees? Can I quote here from evidence from Oscar? Of all that might have been within the Rhymian Innovation Committee's powers to make a payment, I expect all charitable trustees to think hard about whether such payments would be actively in the charity's interests, because that is one of our duties under charity law. Can I ask Mr Doll, Mr Gray, as trustees, how can you justify the use of charitable assets to pay for Mr Doll's enhanced payment? Well, if I'm happy to kick off of that, it helps. We were one of the last colleges to merge. As you've heard several times, the Edinburgh College model was the original model and the original Severance package. My understanding—I may be wrong, but my understanding was quite clear at the time— that college funds could be used to support Severance packages above and beyond, and that has been demonstrated in the Edinburgh model by the Edinburgh College's merger. That was my understanding. As trustees of a charity, do you not have a moral obligation as trustees to use these charities' assets to their best use rather than enhance payments? I think that for—we have demonstrated at certainly my tenure in the nine years I was the college principal that we had done that above and beyond, creating alternate income sources, developing the college's stay, developing the college student learning experience, and every year producing a surplus against a backdrop of many colleges having a deficit. Our accounts came to this committee every year, our accounts were unqualified every year, and the college continued to grow. So you believe that you fulfilled your duty as a trustee, as a charity? In the context that I think you're saying, yes. Thank you. I'd actually like not to talk about the money just for a minute, although we all know that you've got £304,000, Mr Doyle. Do you accept, as the accountable officer and principal of the college, that you had a duty of care to all of your staff? Can I just say in that context that we have the committee's been provided with the Lincston report in recent days? I'll be very brief, convener. I'm sorry, I haven't read it. Well, I can tell you what's in it. Poor governance and decision making, which appear to have had a cumulative and negative impact on senior staff. Certain decisions, practices and behaviours fell short of what I would expect in a well-governed college. Now, you were both in charge of that college. We're not likely to see you in front of us again. Can I, Mr Doyle and Mr Greig, give you this opportunity to apologise for your poor governance, your lack of a duty of care to the other members of staff? We know that you're happy with your payoff and everything. Would you like to apologise to the other members of staff at Coatbridge College who also faced the same uncertainty about their future as you did? Would you like to apologise for taking so much money, £304,000 and would you like to apologise to the other members of staff at the college that you failed in your duty of care to them? In the first instance, Mrs Scanlon, you're raising an aspect of a report that I have not had the opportunity to read. Well, I've read it to you. And you've based, I presume, those questions on that report. I would also like to remind everybody that we left on 31 October. The college went on until 31 March. My understanding, but I've not read the report, is that it covers the whole period after including and after we left. I'm giving you a chance to apologise. I'm not sure in the context of what you're saying. Are you asking me to apologise because I accepted a severance package that was legal and appropriate? I was losing a job that I loved, that was very successful in. I was losing a five-year salary and a seven-year pension. It's all about you, Mr Doyle. I'm asking about your staff. In the context, they faced the same issues as you faced. Did you fail in your duty of care to all the staff that you were responsible for them? No, I most certainly did not. What did happen was that there was a change in severance policy, which reduced for all of those staff from potential 21 months to a maximum of 13 months. I did not introduce that change of severance policy. I would have liked to have seen, as was the board stated in 10. So you're content that, as principal, leave the money aside, that you fulfilled your duty of care to every member of staff at that college. I'm asking you. Unless you can give me an example where I did lose. I'm asking, did you fulfil your duty of care? Yes, my aunt. You did. Okay, thank you. Thank you. It's a topic that the same report says that the cumulative effect of those events and, in my view, the manner in which the senior team had operated and been led under the outgoing principal appeared to have caused the senior management team to collapse. Resulting in a team of seven being reduced to two, it's difficult to come to any further conclusions on the specific impact upon the senior staff of these matters. Given the reasons for the absence of some of the senior staff, was not objectively assessed for the occupational health as required under the Coatbridge rules. I just, you've made it clear, you haven't seen this report, but that would seem to me to make it clear that they believe that the way in which you acted contributed to the problems after you left of the senior team, effectively collapsing from seven to two. There was one member of staff off who was the director of HR, and she was off through stress, which had nothing to do with me. It was the relationship that she's told you with the board. Other members of staff were sick after I had left. We had, under no circumstances, a poor management team. The college had been highly successful because of the hard work and professionalism of the senior team. They had all gone through extensive leadership training. There were no issues at all in terms of the awards that we won every year and continue to win. I don't recognise the description of a senior management team being led. Every single thing that we did within the college was well received by students and staff. I'm sorry, but I don't understand why someone would say that there was a problem with leadership. I left in 31 October. My senior management team were not happy because they were very unsure of their future, but that future was not dependent, unfortunately—and I mean, unfortunately, on Mr Gray and myself. I think that just for the record and for balance, it says at the end and bold type in this section, whilst it's true to say that Coatbridge had many successes to be proud of, there was nonetheless weaknesses in government and leadership, which had a negative impact at a key moment in their evolution. So just to put that on the record. Would you agree that funds from any source coming into the college were charitable funds? I think that that's clearly yes, because the charity is the college. Anything coming in is part of that. I would agree with that. And yet, we're being told that the resources that the college were going to put against Mr Doyle's Severance package came from commercial work and not from public funds. But frankly, it doesn't matter. It's all charitable monies. I would agree with that totally. I think that what you've got to also agree is that the college over many years, as John has said, raised significant additional funds, call them charitable or anything you like, but additional funds beyond those funds given to us by the Government. Mr Doyle wasn't operating on a commission basis. And those funds were plowed back into the college for the advantage of staff, students and everything. So I quite agree with all of that. The main thing is that you accepted that it was all charitable funds. Yes. Can I ask you, Mr Gray, do you believe that the money that was paid to Mr Doyle was compensation for constructive dismissal? To be fair, I've got an email in front of me here from you in which you refer to that. I actually used the word constructive dismissal. You did. Compensation for constructive dismissal. Well, I think that if you want to argue the point, I could say yes, it was constructive because he was not given any opportunity to apply for a job in the new college, so he was out of a job through no fault of his own, and that was the end of that. So in your mind it was compensation for constructive dismissal? Well, current constructive dismissal, termination, whatever, I mean you can play with all sorts of words you like. He was out of a job through no fault of his own as a direct result of the government's policy in college mergers. Mr Doyle, did you sign a compromise agreement? I signed a settlement agreement which was standing operating procedure for the college. On which date was that? It would have been around the 11th to 12th, 13th, something like that in October. So it was early in October? It was about mid-October. And yet we've got a letter here from, at least an email from Pauline Docherty referring to the fact that you will be signing a compromise agreement. Did you ever sign a compromise agreement? I think there's some confusion again in the language and I fully understand why. Mr Brown last week was talking about settlement agreements. I think he was asked the question on compromise settlement and I thought he'd clarified it that the settlement agreements that were used were there to protect the institution, not to in any way stop people, for example here, talking about what happened. It was there as a standard agreement that all staff signed from the principal down when they were leaving the college. It wasn't meant to, in any shape or form, stifle anyone's discussion at things like this. Can I just ask finally Mr Gray, you referred to earlier and I think as a recognition of your humility where you recognised that perhaps you could have signed posted the committee more effectively in the information that you provided to them and specifically were referred to the business case, which doesn't appear to be any business case. Do you not feel let down by that? Do you not feel that information that you provided to you should have been clear? You should have been briefed on what you should have provided to the committee by Mr Doyle? You've shown a bit of humility earlier and says, look, maybe I've got some of this wrong, maybe I should have in hindsight provided more information to the board. So let us recognise that here as a committee, that humility, at least on that issue, maybe not on others but has been shown. So do you recognise that you could have been better supported through those cases? Because it's not your responsibility to provide a business case. Somebody needs to provide that to you. As you said, you're not paid to be the chairman of the board. You said that you make a 120-mile round trip to get to the board. So obviously you're a committed individual who wants to do that because they want to better the college. So should you not be provided with the appropriate material so that you can be briefed by the council officer? I think that sitting here today and looking back, and it's a great thing, hindsight. No, absolutely. And we could argue a lot of the cases that you're asking about should have been handled better. And I would admit to that totally. So do you not look back in that and say, Mr Doyle, tell you what, I went into that board meeting, I had to make these very important decisions I now know that you were the accountable officer. You shouldn't have been able to excuse yourself from at least ensuring that I had objective and information before me properly for me to be able to take this decision. Mr Doyle, that was your responsibility because you've shown humility, you've came to hear in public and said, yeah, I could have got some of this right in hindsight, I should have done this, I should have done that, but shouldn't Mr Doyle been placed in that position as well? After all, he was paid for it, you weren't. Let's not look at Mr Doyle, let's be clear. As far as I'm concerned, I'll come to Mr Doyle in a second. Over the years, John was there nine years during my whole period of chairmanship. You were let down. I had a very good working relationship. Yeah, we understand that, yeah. And we discussed all things to do with the college on a regular basis. If there were weaknesses in this particular respect, I didn't see them. I thought we were carrying out our responsibilities in a proper and responsible fashion. I understand that, Mr Gray, I respect that, but now you look back in it and you say, I'll tell you what, John, you could have done a bit more for me here. You could have really ensured that I was in a position of being able to take this decision and ensure everyone was briefed accordingly, because I'll tell you what, I don't want to be placed in this position. I've got a career and private enterprise over the years, as Richard Simpson says, there's been a good savi here. Now this is an unblemished career for me. I went into this in a charity trustee. Why have you done this to me? Have you not had that conversation? No. But you should have, though, should you not? Do you want a reflection? You could say that. So Mr Doyle, do you not feel that you've let Mr Gray down? I think, as Mr Gray said, in hindsight, when one picks over all of the various detail, including the access to the guidance by the board members, which was there, it was easily found, and that's where I got my copy of the guidance. Of course, hindsight is a great tool, and none of us would have wanted to be here looking at in detail errors that have been made. So you accept that there were some failures then? Well, on the basis— Because Mr Gray's done that, so let's show some— On the basis, absolutely, on the basis that there were emissions and— So can I just ask you the final question then? Why not pay back the £304,000? Why not pay it back? And let's start again with an objective process and do what we should have done at the outset. That would allow you to then make the case that, yes, I should have been paid £304,000. It would allow the board who are there now to make that decision properly informed. So why don't you pay the £304,000 back, Mr Gray? Mr Gray, if I had been an opportunity to be at the college, I wouldn't be in this position. I left a successful career through no fault of my own. I lost five years' salary and a much-to-just pension. To be fair, that's not a question that I'm asking. You don't have to ask anything. Why not rewind? Well, if we could rewind— Well, if I can ask the minister, can we rewind? And she says, yeah, we can see what we can do. If Mr Doyle wants to pay the money back, we'll allow a proper due diligence process to be followed and then we can go forward. And perhaps the committee could make that recommendation. Would you not go for that process? No, I wouldn't go for that process on the basis of what I've just said. I lost a successful career through no fault of my own. I'm not talking about your career. I'm talking about the fact that you've let Mr Gray down. You haven't provided him with the objective information as the accountable officer. Do you know how I feel at this man who's in a done blemish career? He's been in private enterprise. He says that he travels 120 miles to get to the college. He doesn't get paid for it. You're saying that somebody has received £304,000, and you're not willing to rewind and ensure that we get a proper due diligence process in place. I'm very willing to rewind in the context of lessons learned. Do you not be ashamed that you're not willing to at least rewind and look at this and have a proper objective process and allow this man to for his career to be looked at again? Mr Martin, I lost my job through no fault of my own. I lost an income source. I have no other income source apart from my reduced pension. I feel in the context of an employee let down. I feel in the context of a principal and a chief exec that we could have got things better, absolutely, because, in hindsight, it would have been watertight. It would have been signing in blood that they understood the guidance. As Mr Brown had said several times, that the Numeration Committee understood the guidance. The business case would have not been produced by the Renumeration Committee, as it was explained to me the next day, but it would have been done in context for the executive. You won't pay the money back. There is no reason for me to pay the money back. So you won't be paying it back? I won't. Mr Gray, do you think that you should pay it back? No. Okay. Can I just confirm, just for the record, that Alasdair Gray attended the committee from Wiley and Bissett and understand that he was responsible? He made it clear to the committee that he was responsible for the overview, but he wasn't as you confirmed, Mr Doyle, the auditor who was personally responsible for the college. But in saying that, we are provided with an overview of responsibilities. I think, sir, it's very important in terms of the internal audit function that the two internal auditors who operated the college and worked directly to the audit committee and the chair of the audit committee weren't questioned. You didn't have an opportunity to ask them about those. Okay. Okay. That was good. I think that what's important, convener, is that the internal auditor was not told by Mr Doyle on 29 January 2013 that he had entered into that severance arrangement. That's what's important. Except, sir, there were seven... Can I just clarify, Mr Doyle, in terms of how we go about the information that needs to be signposted to us, we'll take advice on the clerks on that, and not from you, if you don't mind. No, of course. I think there's a number of issues about how the information has been signposted for the board that you are responsible for, so let us deal with that, and we can deal with how we pursue further information. That's a responsibility of the committee. Can I thank you both for your time this morning? Can I move the committee into a brief five-minute interval? Thank you. Okay. Good morning, colleagues. May I welcome our second panel of witnesses today, who are Angela Constance, the Cabinet Secretary for Education and Lifelong Learning, and Eileen McEchnie, who is the director of advanced learning and science to the Scottish Government. I understand that Angela Constance will like to make her an opening statement. Thank you, convener. Can I start by saying I very much welcome the committee's scrutiny of the voluntary severance arrangements of the former Coltbridge College. This is rightly a matter of considerable public interest. We must understand the detail of what happened so that there is no repetition. And fundamentally, this is about a failure of governance. My college governance task group will take full account of the committee's report on Coltbridge and its previous report on North Glasgow College. I chaired the first meeting of that task group last week, convener. This group will move swiftly and will produce recommendations early in the new year. Our college reform had three priorities, learner and employer needs, value for money and stronger accountability. We wanted a regional structure, colleges of scale and influence, delivering coherent quality provision. Mergers meant that there would be voluntary redundancies. With the Scottish Funding Council, we found funding to help that process. As a result, we now have a sector generating significant efficiency savings year on year. Improving standards of governance was central to reforms. In 2011, we commissioned an independent review led by Professor Griggs. He concluded that the structure and governance of the sector, as was then, was not fit for purpose. In particular, Professor Griggs said that college governance needed greater public accountability, consistent with the evidence and the investment that we make in it. The events at Coltbridge reinforced the case for improving governance the way in which decisions were made was appalling. Those entrusted with the stewardship of public funds fell well short of what is required. The funding council has set out the action that it took consistent with the guidance at the time. It does acknowledge that it could have been more proactive and that is something that my task group will consider along with early warning mechanisms. However, we have to recognise that the position has now already changed and markedly so. The Auditor General has confirmed that the new controls are much more robust. Before reclassification, decisions on severance were the sole responsibility of colleges taken into account funding council guidance. Following reclassification in April 2014, incorporated colleges must now seek approval from the funding council for severance and settlement arrangements. Doing so is a term and condition of grant and ministers now have more explicit powers to remove incorporated college boards for serious or repeated breaches of those terms and conditions. The funding council's forecoming guidance will reinforce this and the process that colleges must follow. The committee's report on co-bridge college will help to inform that guidance. The essential elements of good governance and improvement are in hand. That is as it should be. Colleges are delivering for students. Our key indicators are improving. The overwhelming majority are well led and well governed. However, all colleges need to be led and governed to high standards. Through my task group and other relevant work, I will ensure that we have greater confidence in the required standards and to ensure that those required standards are met across the sector. Thank you. Cabinet Secretary, I just open questions. Can I firstly remind us your statement where you said you thought you found the governance arrangements to be appalling? Is that correct? Yes. Yes. So do you think that Mr Doyle should pay back the £304,000? I, as I said, convener, am appalled at the poor governance and the lack of stewardship. I, of course, would, if I could, rewind the situation to ensure that payments in excess of £300,000 which were completely exorbitant, that those payments were not met from the public purse. It is clear to me that there has been a lack of stewardship of public funding. Of course, I would want Mr Doyle to pay back money that he has received at the expense of the public purse. Whether there is a mechanism to do that is, of course, a different question. From a personal point of view, as the Cabinet Secretary, you think that Mr Doyle should pay back the £304,000? Yes, I do. In terms of the position that you advise of the funding council, you advise that they could have been more proactive. Is that Lawrence Hill's advice? Or is that your opinion? That is my opinion, convener. Can you give me two examples of where you think that they could have been more proactive? When I look at the timeline of events, I can see that the funding council issued the guidance on severance at the start of 2013, and that is right and proper. When I look at the timeline of events that the committee has been studying very carefully, I see that the decision in terms of payments made to the former principal was made at the beginning of the year. The site of that decision was not evident until much later on in the year in terms of October. What I am keen that my task force looks at is what would be reasonable for the funding council to do proactively. What more could have been done realistically? I know that much of that is with the benefit of hindsight. While it is right and proper that the guidance was issued, but should there have been follow-up procedures to ensure that that guidance was getting to the right paper? To be fair, let us be clear here, though. Mike Russell announced the decision that he should receive political support for the college mergers. There has been no surprise to Mike Russell or any minister that we will only have voluntary servants packages, and, yes, they must have seen the possibility of colleges taking advantage or college principals possibly taking advantage of those arrangements that have been put in place. So did Mike Russell not say that he is really concerned about this? I want to have a consistent scheme across the board, and I will tell you what, I will also make a point to every one of you, if you do not adhere to these, then you will not make the payments because for these schemes to be successful, they require Scottish Government funding. So why not just tell them that and say, we are just not going to give you the money when you try and draw it down? Because we have had Scottish funding councillor officials who have advised, after, for example, Mr Doyle's case, when do we arrange payment? We have got an email exchange between Mr Kemp and Derek Baxter, director of finance at Cotebridge College, making the necessary arrangements for the money to be drawn down from the Scottish funding council after Mr Doyle has been paid out. There seems to be a pretty relaxed attitude to the fact that, yes, you can make your own arrangements, we will pay or share, but anything above that has to come out of somewhere else. Well, my predecessor, Mr Russell and senior civil servants and indeed the funding council were clear about the conditions and expectations around the use of strategic funds that were to be made available to support voluntary severance schemes and the detail of that was that payments were not to be an excess of a year salary or 12 months salary. Mr Russell had been very clear that there needed to be restrained. One of the very deeply disappointing aspects of this appalling set of affairs around Cotebridge College was that there was a different severance scheme for the principal compared to other members of staff. That happened in other colleges as well, didn't it? Yes, and it shouldn't be... It's not just Cotebridge, we've got the potential of other colleges. I'm more than aware that the Auditor General has pointed to isolated examples of poor governance and poor practice around severance and that she has made two section 22 reports. Those, the fact that she's had to make two reports on isolated examples is not acceptable and I'm in my current position not going to tolerate poor governance. But we shouldn't let the actions of a few individuals tarnish the reputation of the whole sector and that's what I want to be really vigilant about. So let's try and keep this as clear and succinct as we can in terms of exchanges. If you also look at other colleges, they've received packages of 20 months, 24 months. Do you find that unacceptable? Do you think somebody should receive a package of 20... Unless it's code North Glasgow and Coatbridge, whom I've already been subject to section 22 report. But let's look at other colleges. Some of them receive packages of over 20 months. Some of them receive payments in lieu of notice of over six months. Some of them receive packages very similar in monetary terms, not that far off what Mr Doyle and what Mr Knox have been referred to. So do you find them unacceptable, those sums, as well? No, I don't find it acceptable. Do you think they should pay it back? I have to go on the concerns raised by the Auditor General. So there was two section 22 reports that raised very significant concerns and serious feelings in governance. It's okay if you tick the boxes then. No, it's not okay if you tick the boxes. Well, that's what the others have done. No, well, I mean... So other colleges have said, yeah, we've ticked the box, here's the business case. I mean, what business case could possibly say that somebody should get above 13 months? Could you give me one example of that? No, I can't give you an example of that. So why did these other colleges... It's an important part of our work, though, is to consider that Mr Doyle can say, yeah, the others received 21 months, they received 24 months. So, you know, I've just bumped it up to 30, but, you know, we've been told it's 13, but the others are doing what they want anyway. So if you find it equally unacceptable for them, then why not say to them, as well, then? Because that wasn't what Mike Russell envisaged, was it? Did he want people to get payments of over 21 months when all the rest of the staff were given the basic terms? I mean, what I'm saying to you, Mr Martin, is that I don't think it is acceptable or fair, particularly given the challenges on the public sector, that there should be more preferential voluntary severance schemes for senior members of staff that are out of kilter with the rest of the sector or indeed, you know, the rest of a region or the rest of an individual organisation. In terms of the strategic funds, those use of the strategic funds, there was very clear guidance and expectations around that, but the reality is that prior to ONS reclassification, colleges did have discretion in these matters. I'm glad to say that that is not the case now. Even though they had a discretion, it was for the colleges to be making very clear business cases, and we know that in some cases that did not happen, and that's not acceptable. The budget for severance payments that the funding council then allowed to be spent on these deals right across Scotland. You would have been sort of pretty good, but yes. Yes, yes, yes. Thank you, and you'll be aware, cabinet secretary, that there are 14 such deals that have been brought to our attention by the Scottish funding council, which, after all, is your body. And the total claim from the funding council so far, and we haven't got the full figures yet, and it's not clear to me why we haven't been given the full figures yet, is £1.081 million. That's contribution your budget made to those severance deals. Were ministers briefed on that as that process went on from 2011-12 onwards? Ministers would be in regular contact with the funding council, and it would indeed be discussing these matters. It is important to remember, and again, the Auditor General for Scotland has confirmed that as a result of the merger process, and we acknowledge that voluntary service has been part of that, that the merger process overall has been well planned and implemented, and that voluntary severance schemes overall have been appropriately implemented, and that savings have been made, and that in terms of the cost of voluntary severance we're now in year 3, and that it would take three years for the cost of severance to be paid back, There are 14 severance payments that we've been given advice on, of which four are over 20 months, and Mr Doyle's is not the cheapest. There's one that comes in that are whacking £314946, of which the funding council contributed £133,788. Were ministers told about that one? Did the funding council tell ministers about those things? The funding council would be in regular contact as they are with myself, and they would be in regular contact with my predecessor, and they would certainly be discussing the progress made through the merger programme, and they would indeed be discussing any concerns that were emerging at the time. It just feels like it was a price worth paying, that the merger process was obviously the Government's objective, that had been approved by Parliament, and therefore the budget that you've very helpfully confirmed was agreed by ministers, was just the price worth paying to get those merger deals done? No, I think that we are living with the reality of a set of arrangements and that ministers don't have the power to direct college boards on these matters. That is something that my governance task group will certainly revisit. That power to direct colleges was given away, if you like, in 2006. Going forward, we want to ensure that we have the very highest of standards, but we have to remember that the merger programme overall is a success. It's a good example of public sector reform, where the college sector is delivering more for learners. You'll give me if I stay on the issue that the Audit and Committee are responsible for. Those are wider points, not for our committee, but for other committees, so I'm sure that you'll appreciate it. Ministers could have decided not to have a budget line for SEPRN's payments for the funding council. You simply could have decided that, as you very correctly say, these are matters for the boards themselves, and there was no need, was there, to have a budget line for SEPRN's payments from the Scottish funding council? Well, in terms of the merger programme, there was a recognition that voluntary SEPRNs would be part of that, and with any major programme of reform of that nature, that would be expected. It was important, I believe, that the Scottish Government and the funding council would allocate funds to assist that major programme for the overall good of the sector. In essence, it was about investing money to save. I totally agree. I could quite understand investing for the merger process. What I can't understand is investing to provide 14 enormous pay-offs to former college principals and other key staff. That's a bit I don't think the committee can understand. No, and what I'm saying, Mr Scott, is that there are cases where there have been unacceptably high SEPRNs payments. None of us like that, I can assure you. I certainly don't approve or appreciate the fact that there has been poor stewardship of public funds, but the funding council acted within the powers available to it at the time. The matter has been rightly scrutinised. I had tried to indicate to Mr Martin that there is a case to look for the funding council. I mean, and indeed ministers, where we could be more proactive to ensure that there can't and mustn't be a repetition of this poor governance, poor leadership and absolute poor stewardship of public funds. That's what I'm absolutely determined to do, building on the success of the changes that have already taken place as a result of reclassification. I'm sure that we all agree with that, but we're concentrating again on what happened from 2011-12 onwards. I just want to be very clear that ministers were informed by the funding councils that those 14 separate SEPRNs payments were taking place and that ministers were, it was brought to ministers' attention as to the scale of the contribution from the minister's own budget that was therefore incurred. The information that would be available to me, Mr Scott, would suggest that ministers would have been advised of concerns, but not at the time that decisions were being made or at the time where problems were arising. I think that Coatbridge is an example of that, where a decision was made in February, and it didn't come to light to the October, either in terms of the funding councils' awareness or ministers' awareness. That's where we need to look at what proactive processes could reasonably be put in place to ensure that that doesn't happen, bearing in mind that the funding council now, in effect, has a veto over SEPRNs arrangements. I understand that. Can I ask one last question? Are you satisfied that in those 14 cases that there was a business case that will stand the test of the audit that Audit Scotland would do? Apart from the ones that you've already rightly mentioned, which Audit Scotland have already looked into, in the other cases, are you satisfied that the business case exists and it's a matter of, as a work public record, that we could see that and be satisfied that that was the case? No, I wouldn't be. Thank you. So, do you just clarify that you wouldn't be able to clarify that there's been business cases for all of the... Well, I'm very conscious that the Auditor General has provided two section 22 reports and has highlighted four other colleges where she didn't produce section 22 reports, but she did highlight that practice had fell short of what was expected, whether that was in and around processes. Can we just clarify, though, for the other colleges that were part of the merger process that we've asked the funding council for the business cases to be sent to us, which we've not received yet? Would you expect all of them to have had a business case? I would expect a business case to have been followed and presented. I mean, that would clearly be an expectation. And for the funding council who have made the money available to have had a copy of the business case? I would indeed. You would expect them to do that? I would expect them to do that. I would expect them to do that. Thank you, ma'r Lord. Cymru, rydw i'n mynd i'r Mr Doyle a'r Mr Gray an acceptance that the funds that were used were charitable funds, despite their attempt to obfuscate that the funding on the colleges part came from commercial sources. Do you have a concern about the use of charitable funds for this sort of payment? Well, of course, members of boards are charity trustees and there is a role for Oscar and there is legislation in the round charities that board members have to comply with. Irrespective of the source of funds, whether funds come from the public purse or charitable or commercial activity, it has to be recognised that some of that commercial activity will come from the public sector. Therefore, I think that the issue is the same if it is about the stewardship of funds and where there has been poor stewardship of funds. It does not really matter whether they are from charitable or commercial purposes or activities or whether they are for public funds. I mean that poor financial governance is poor financial governance at the end of the day. Do you think that there is a case for bringing in legislation to cope with situations where excessive payments have been made from the public purse and clawback is needed or appropriate? I think that it is always in the circumstances to consider what would be appropriate or helpful. I know that Oscar is reviewing the evidence of committee very carefully and are following matters. I know that Oscar currently has powers in and around disqualification. He presents an annual report to Scottish ministers, which is led in Parliament at the same time. In previous years, that has focused on more technical aspects, but that is an opportunity for Oscar to make recommendations about charity's legislation. We want to ensure that it is robust and fit for the future. In terms of clawback, a lot of that relates to employment law. We do not have any facilities to make changes to employment law. There are legislation and proposals that are going through the UK Parliament just now, in terms of two separate bits of legislation. One is the Enterprise Act and the other is a small business enterprise and employment act. That process that the UK Government has to go through in terms of its own parliamentary process will not be complete until March. Obviously, the Scottish Government is following that very carefully, but there are some proposals in both of those bits of legislation in and around a cap on voluntary severance. There is also a proposal in terms of clawback, where people have worked in the public sector, have earned more than £100,000, and if they turn up in employment in the public sector 12 months later, so there will be scope for other matters to be considered. You have a working group at the moment looking at various aspects. You have described that, even under the present arrangements, it would be very difficult for the situation to repeat itself. Are you satisfied at this moment that the present structure would avoid the situation arising again? I have given some reassurance by the evidence and comments by the Auditor General for Scotland who acknowledges that the new arrangements are far more robust. When you are dealing with the individual actions of a few individuals, you cannot always legislate or have policy procedures that will remove all risk of individuals at a future point in time behaving inappropriately or exercising poor judgments or poor governance. However, what I am absolutely determined to do, as far as humanly possible, is to make sure that we have no repetition of what we have seen in Coatbridge College, or indeed in the other colleges where there has been concern. I will not tolerate poor governance and I will not assure committee that the task force is looking at all those matters very closely. Of course, it will be paying close attention to the forthcoming report from the committee. One of the frustrations that the committee has had has been that the only mechanism for penalising appears to be to cut college funding to claw back from the college, which, of course, nobody wants to do, because that impacts more on the students than it does on the people who have crossed the line. Is there some comfort coming down the line on that particular? Will the SFC have more teeth? There are two things that I would like to highlight to Mr Beattie's question. I think that it is a very important point that the funding council currently can introduce financial sanctions, but to do that would only be at the expense of the college or institution itself or students or the day-to-day operations. It is understandable that the funding council would not want to implement something that could be quite draconian and that would have an impact on learners through no fault of their own but as a result of individuals. It begs the question about what other sanctions the funding council should have at its disposal, because sanctions should be a deterrent, but they also need to be workable if required. That is something that, again, we will look at very closely through the work of the task group. To go back to my earlier point, we want to nip in any difficulties in the bud. We want to look at what proactive action can be taken to ensure that the funding council does not have to use its veto powers or use sanctions. Your phrase is the one that I want to address, and that is nipping in the bud. In 2011-12, Stevenson College and Telford College operated a scheme, known as the Edinburgh scheme, with a 21-month redundancy. We have not got the details from the funding council as to how much they contributed towards that, but the sums were substantial, £249,000 in one case and £202,000 being the total cost of release in the two colleges. The evidence that we have been getting on Coatbridge College, which also refers to involvement in other college mergers, would indicate very strong government involvement, and Mr Mullen, as the point person for Mr Russell, appears to have been engaged in the extent of writing papers for these merger boards, providing support of various sorts. The Government surely would have been aware in 2011-12 that Stevenson College and Telford College had operated a voluntary severance scheme, which was 21 months and not the 13 months that the funding council was recommending. What was the reaction of the Government to that? I am not aware that the Government was aware prior to decisions being made on either Telfords College or Stevenson College. We can go back and scrutinise the detail for Mr Simpson and the committee on that point. It would be helpful to know whether Mr Mullen was involved in those two early ones, because if he was, he would perhaps have appreciated the difficulties that were arising on which he was involved in severance arrangements at Coatbridge. What I do not understand is that one of the defences that Mr Doyle and Mr Gray were putting up was that there was the Telford scheme and that had been operated, or the Edinburgh scheme or the South Lanarkshire scheme, as it has been variously called. That scheme has been operated, so why should it apply to one set of principles and not to others? Leaving aside the governance arrangements, which we have agreed were very poor in reaching those decisions, but as a defence, that strikes me as not really totally unreasonable. I just do not understand why, if that was something that was unacceptable, and you have said that it was unacceptable to have these exceptional payments, why it was not picked up and run. So could we see, perhaps, that it would be useful to have a diary of Mr Mullen's involvement in all the colleges' mergers, because that would give us an understanding of, in relation to the minutes of the merger committees, as to exactly what was going on in terms of information being passed to the Government? There are two things there, convener, that I would like to say to Dr Simpson. I am not sure that that is a defence saying that it is because something happened elsewhere that it can automatically happen in your own institution. The Government and the funding council were clear about the restraint that should be shown over the use of the strategic funds to assist with voluntary severance, and we have rehearsed a lot about the powers that existed then and the powers that the tighter controls that now exist. It is important to stress that Roger Mullen had no role in decisions around voluntary severance, because those were matters for boards of management. I am not suggesting that, and if that is the impression that I have given, I am not saying that he had that role. My concern was that he was at all those meetings, and he would be aware of that. If there were concerns that you have expressed in the Government, you said that it was unacceptable in those arrangements, but those arrangements were in place for Telford College and Stevenson College. Mr Mullen was not at all involved in that. I can understand that the Government would not be aware of it, but if Mr Mullen was involved in the Stevenson and Telford mergers and the discussions around the voluntary severance payments for Brian Lister and Miles Dimstall, then, even if it was not a concern, the Government would then have been aware, or at least a Government point person would have been aware of what was going on. It is not that he was responsible in any way for them, but he would be aware of it. I would like to have clear that he was not aware of it by seeing diaries that demonstrate that he was not involved in the Stevenson or Telford mergers where severance payments were in any way discussed. We have to be careful about making assumptions about what people are doing, not the assumption minister. Of course, Dr Simpson, if there is more information that we can give about the role of Roger Mullen, his role was that he was employed and had a contract of employment due to his very specific experience and expertise in change management and organisational change. We know that an important part of a successful merger is about establishing the culture of new organisations. The sort of work that he was involved in was completing culture studies at the requests of institutions who wished them. That was to assist with the merging of organisations to ensure that they had the best chance of success and that they were on a solid footing. If we can send committee wishes an example of the sort of work that Mr Mullen was involved in, I am happy to do so. To establish what other information we have about activities and meetings, that is helpful. I want to make it absolutely clear, convener. I am not being critical of Mr Mullen or his CV or his experience. I would like to know when he started his job—he obviously finished at the end of the process or certainly in May this year—but I would like to know when he started and whether he was present at the Stevenson and Telford college involvement in their merger discussions when severance payments were discussed. I reiterate that he was not in any way—his job was about the culture. I have read some very useful and interesting papers about developing the culture of merger for the Lanarkshire College and the Ayrshire Colleges. It is not a problem there, it is about whether he was present when those issues were discussed and therefore would have acknowledged of it, which, if there were concerns being expressed about that, should have been passed on because it was out with the funding council's guidance. We have just been supplied with the Lincston report. When did you become aware of that? When did you receive that report or have knowledge of it? I personally had a way of the Lincston report in advance of my meeting with the family of Francis McGeachie, who had requested to meet with me around what progress had been made to implement the Lincston report. When that report was provided to my predecessor, I will check the date, but that would be 2014. The report was produced in November 2014. That would be very useful to get to. Did you meet with the family or roughly what went on? Yes. I will check my diary, but I am sure that it was the fourth of November. This year? This year. If the Government were aware of the report and were also aware that the committee had begun an investigation of the Coat Fridge situation, nobody thought to give us the Lincston report until in fact this week. We have been at this now for some considerable period of time, and that report is a highly pertinent document. Your officials must have been following the evidence. Did nobody think to say at some point, hang on, that they have clearly not got the Lincston report because that has quite a bit of information in it about the situation? I am not saying that it was your responsibility, minister. I am not saying that at all. I am just saying that did nobody think to help this committee by pointing out to the Scottish Funding Council that they should try to ensure that this report was in front of us? Maybe I can clarify some aspects of that, convener. My understanding was that the funding council had been in touch with the committee in October. In terms of the background, yes, the funding council commissioned a review of the management of the major process in Lanarkshire and its impact on senior staff. When that report was completed, you will appreciate that the backdrop is highly sensitive around the tragic death of Frances McGeeky. My predecessor, like me, had met the family or representatives of the family and had agreed that the report, certainly in the first instance, would have a limited circulation. The report went to the new principal and the new chair of the newly merged college. When the Auditor General requested access to the report, that was facilitated. External auditors had access to the report. The family of Frances McGeeky had said to me at our meeting that they were comfortable with the report being made available to the committee that they had never intended it to be confidential. They had been watching proceedings and investigations undertaken by the committee and were content for that report to be released. In fact, as conveners, the family provided us with that report. In October, but in the 20th of this month, from the Scottish Funding Council, I attached to a letter advising us to clarify that the roll-up of October comes into the book. Given that ministers appoint the chairs of college boards creating a direct line of accountability to ministers, it concerns me, and I think that the general public out there have taken a fair degree of interest in the Coatbridge situation. If it was not for the Auditor General in section 22, we would know nothing about John Doyle's 304,000. Were their concerns raised, we were going from 30 odd colleges to 13. One in three principles was going to have a job after it. Every party supported the mergers, but we supported it on the lines that it would be higher quality education, efficiency savings and reduced duplication. We were looking forward to the quality of education but also efficiency savings. Surely, in all of that, there must have been considerable discussions about severance payments. Do you have a minute of the college chairs and the accountable officer in the Government where severance payments were discussed and advice was given to chairs of college boards? I think that it is important to point out, Mrs Scanlon, that in terms of the individuals, the principal and the chair of Coatbridge College at the time of the appalling events, that the Government had no role in appointing the then chair of Coatbridge College, that arrangements have now changed because of the violence. Was John Gray not appointed by ministers? No, he was not. The situation that you referred to about the Government now appointing regional chairs and chairs of college boards as a result of the legislation, so that practice now is one of the benefits of the 2013 act where there is a more regulated process around these very important appointments. These jobs are done by volunteers, but none the less we expect the highest of standards, but the Government did not appoint. As the holder of the office as chairman of the College Board of Coatbridge, and given that his line of accountability was to ministers, were there regular meetings during the merger process to ensure that it was a success? Were there regular meetings with officials and with the Government? Were there severance payments discussed? It is the role of the funding council to take on that monitoring process that it describes. It was a funding council that was overseeing the process towards merger, including the severance payments. My second question has been mentioned quite a bit about the Scottish funding council had an ability to claw back money, which it did not do. In a sense, it failed in good governance, but I am asking the question in retrospect but also for the future. Why was the Scottish funding council pay-out not on the condition that severance payments were in line with its recommendations and guidelines? If they said to Coatbridge, we will only pay out if you adhere to our guidelines. Was that in place and is it in place in future with the new arrangements that you have in place? There are three aspects to your question, Mrs Scanlon. In terms of the pay-out, the payment was made on 25 October and funding council funds were not released until March 2014. One of the aspects of the affair that is completely unsatisfactory is, apart from the fact that the actual decision on severance packages was made away back at the beginning of the year in 2013. There was no visibility of that for the funding council to the October was that, despite a concerted level of activity between 10 October and 24 October, the funding council communicated in writing and in person that the current package was not acceptable. The decision was made on 23 October and the payment was made on 25 October. The normal practice that I am told is that payments are made a month and a year when people are paid. There was a very hasty decision made about the actual payment, about the public money leaving the college and going into an individual's bank account. The decision that the funding council did fade, and of course it could have clawed back the money from the college, but that would not have penalised the individual with £300,000 and their bank balance would have penalised the college. A judgment had to be made about the impact on the college at that time. In terms of the new arrangements, as the Auditor General has said, the funding council now has a veto over arrangements, because prior approval must be sought before decisions are made and money is paid. There is a different set of arrangements that are now in place, and that veto exists irrespective of whether it is commercial funds or public funds that have been used for a service package. I am aware of all that, but I just wondered whether, in clawback, the Scottish funding council could not have said to Cotebridge, that we will not pay £1.3 million unless you adhere to our guidelines. Could they have done that previously at the time of the Cotebridge? The funding council made it very clear, again in correspondence. I quote correspondence from the funding council on 24 October, saying, You should not pay or take any further steps to commit to any deal along the lines that you have indicated to me until you have reassured me that the voluntary service arrangements that are in accordance with good practice are in accordance with them. Yes, but they still did not say that we are not paying anything above our guidelines. Did they have the ability, the responsibility and the power to say that? Could they have withheld any funding that was over and above their guidelines? The facts of the matter are that the funding council in March did not pay over and above their guidelines. The college from its own resources paid the excess, if you like. That is still unsatisfactory in terms of the actual payment that has been taken from college funds, but the funding council did not pay any excess of their guidelines. My final question is, and I think that we are all very grateful to the family of Francis McGeeheave for giving us sight of the Lincston report, but I have to say that I have been totally outraged at the money that John Doyle walked away with, but the compassion and empathy for the staff at that college is just tantamite. It is quite, reading this report, it is not only tragic, it is horrendously sad. I just want to read one sentence to you. Poor governance and decision making had a cumulative and negative impact on senior staff. Certain decisions, practices and behaviours fell short of what I would expect in a well-governed college. The colleges are absolutely publicly funded by the taxpayer, so what responsibility with John Doyle's lack of responsibility and duty of care to his staff? I think that all of us can put on the record our grateful thanks and how much we value every person that teaches and gives their time, whether it is at NHS or particularly in colleges. However, what duty of care did the Government have? You must have been very aware that many people were facing uncertainty about their future incomes, their future roles and their future careers. That is quite devastating on the staff, on the linkstone report. Did that form part of any discussions? Was any pastoral care suggested? What was the Government's role in that? I think that the report prepared by Alec Lincston makes for salutary reading. Although he says that the new college Lanarkshire merger process overall was very comprehensive. He nonetheless highlighted a number of significant weaknesses in governance and leadership. The fact that there were so many different accounts of a significant matter, I found very troubling. I know that the author of that report found very troubling. It demonstrates the extent of dysfunction and disharmony within the college. There were very high levels of sickness within the senior management team. If there are lessons to be learned, we need to find ways to be more vigilant to that level of sickness in particular within the senior management team. That should set alarm bells about how an organisation is performing or coping. There is a commitment by the Scottish Funding Council, and I will oversee that commitment. The funding council has accepted all the recommendations from the Lincston report. Some of those recommendations have already been implemented. Other recommendations will be implemented, for example, the issue of further guidance on severance. The funding council has not issued that as yet, and they have explained that to the family, because they want to receive the report from the Public Audit Committee to ensure that the findings of the committee also feed into any subsequent guidance that is issued. Before we move on to the next question, I just clarified when the payment was processed by the funding council. We have an email that has been provided to the committee day to 10 December 2013, from John Kemp, an African Reed, who is the funding council representative, and he says that this is to Derek Banks, who is the director of finance at Coatbridge College, and he says here in the first paragraph, that I am happy to confirm that we will pay 13 months salary subject to a valid claim being made against a voluntary service funding for the merger. I anticipate that the council will agree the transitional funding requested for the merger at this meeting on Friday 13. My understanding, convener, is that the payment was not made until March. We will, of course, double check the accuracy of that. What we have here is that a senior official of the funding council will make it clear that the payment is going to be made. He is not saying here, let us not make this payment. He says that he goes on to say that, given that almost every other merger has been involved in, and due diligence has been finalised prior to the amount of transitional funding made available, I cannot see the fact that Friday's meeting has not taken place that yet has been an impediment in this. However, please let me know and I will arrange either Sharon or a cellphone phone you to advise you of the outcome of the meeting. It is a pretty clear email that is saying that you are going to get the money. Nobody is saying that you are not getting the money, just that it is a clear commitment. On the basis of the 13 months salary, not the 24 months. I note your comments that in the future this kind of thing will not be able to happen again. I am just looking to explore some of the detail of that, if I may, because if I look at the table that we have hopefully got here about previous payments, there are voluntary sevens lump sums, but there are also some pension contributions, some quite eye-watering sums in the pension contributions. I am just wondering whether you can give me some reassurance that pension contributions would also be governed by the changing governance arrangements? It is important that we look at everything in the round and processes that lead to the overall cost to the public purse. One of the changes that was made to the severance package that the principal received at the end of the day was that they did show restraint on the pension aspect. Nonetheless, the overall package that the principal of co-bridge received was nonetheless eye-watering. Eileen, can you say something about pension contributions? We will absolutely take into account the widest implications of funding contribution to voluntary severance as part of the task group consideration, so pension would absolutely come into that. I am grateful for that comment, because, in the cases in front of us, they were obviously paid by the college rather than by the SFC. It is all still public money, and it cannot be paid twice, and it cannot be used twice. I am grateful for that reassurance. Cabinet Secretary, you mentioned the working group, which is under way, in terms of the focus of that particular working group. Is that just going to be based on the college sector, or is it going to include the university sector? We will look further afield. We had the first meeting of the task group last week, and we agreed that we will look at a range of sectors outwith education. There is a representative from Oscar on that group. There are some interesting developments around governance in the financial sector that appear quite apposite for us to look at, but we will look at good practice in health. We will also look outwith Scotland as well. We are conscious that the task group we want to come to a view about clear actions and to report back to Parliament. We do not want the task group to be meeting for ever in a day. It is a short-term working group, if you like, but we are looking further than the world of education and further in Scotland to inform best practice on how we build on the work that is currently done by the sector-led good governance group. On the action points that will come out after the end of the work and the report, will those action points be aimed towards the college sector solely or college and university? The task group is solely focused on the college sector and, for very good reasons, following on from recent decisions that I have taken around at Clyde College, but also following on from the two section 22 reports prepared by the Auditor General and the Public Audit Committee report on North Glasgow. It is focused on the issues and difficulties highlighted by the committee and the Auditor General. You mentioned the Oscar, and we had Oscar provide evidence to the committee. I posed a question to them in terms of powers or further areas that they would like to see in terms of tools on their armory. Has there been any discussions between yourself or your department and Oscar in terms of the current powers that they have and potentially any additional powers that they might obtain or potentially could obtain to help them undertake their roles and responsibilities in a more effective manner? There is an ongoing dialogue between Scottish Government officials and Oscar and the funding council and Oscar. As I said, there is a representative from Oscar that sits on the college good governance task group. It is part of our wider considerations, but it is for Oscar to bring forward proposals and they have an opportunity to do that in terms of their annual report that they bring to the Scottish ministers and also the Parliament. Has Oscar raised any particular areas up to now in terms of additional powers that they would like to see have so that they could be considered by the Government for any potential future legislation? They have not made, to the best of my knowledge, any formal requests on the Government to legislate in and around their powers as a regulator. As always, we are vigilant and open to any consideration. I will ask a final question. The theme that we have heard during the last evidence session that we have on the subject is the themes around management versus the other staff who have just received the basic terms, but management staff have received enhanced terms. When you are like us in this position, I take it if predecessor was the same, where you would have liked to have seen parity across the board for all members of staff. I am very clear, convener. I do not think that we should have one scheme for one set of staff and another scheme for the other. There needs to be parity. We are all agreed on that. Would that have been the same for your predecessor, Michael Russell? He was very clear with regard to the need for restraint and good business cases in terms of the strategic funds for the voluntary severance. The Scottish Government's position is that everyone should receive the same deal regardless of whether they are a principal or a catering staff. However, you all play our role in the college and you all should receive the same deal. That is my view, and I hope that I am making that view clearly to the committee. I am asking as it was at Michael Russell's view. It is a bit difficult for me to ask what my predecessor's personal view is. I am afraid that I would not know the detail of that. My expectation would have been that that would have been our collective view. I think that what would be helpful would be to see an audit trail of that principal. I think that, politically, we would have had an argument to say that mergers are going to take place, and I would expect to have overleading that politically what the minister should be to say, I am expecting everyone to receive the same principle to settlement. What you can see from the various strands that took place was that the Scottish Funding Council was implicated in a process, which was that, somehow, senior managers should receive a better deal from those other members of staff in the college. Despite, as politicians, all of us are saying that that is a disgrace. My point of making is that, as being the minister who was responsible for that at the outset, Michael Russell, it would be helpful for the committee to be very clear what audit there is of information that is provided to the Scottish Funding Council to make it clear to them what you are saying to us today, which I suppose we all agreed on. Everyone should receive the same deal, regardless of who you are. It is important to recognise the limitations on ministerial powers, but I think that I want to be clear that moving forward and looking to the future that it is important that I and the Scottish Government are very clear on standards and on leadership and on what is expected. We are obviously acknowledging that there are new, tighter, sharper controls now in place, post reclassification, but we are vigilant to what more can and should be done to ensure the very highest of standards across the college sector. I thank the cabinet secretary for her time this morning, and I just have a very brief interval to look for change over. I move to agenda item number three, which is oral evidence on the AGS report entitled the 2014-15 audit of the Scottish Government's consolidated accounts. I would like to welcome Callan Gardner, the Auditor General for Scotland, Mark Taylor, the Assistant Director, and Gordon Smale, who is the Senior Manager of Audit Scotland. I understand that Callan Gardner is a brief opening statement to make. As the committee knows, the Scottish Parliament is currently developing its approach to scrutiny, reflecting the increasing financial powers and the Public Audit Committee taking evidence on the Scottish Government's consolidated accounts is an important part of that. This is the right time to strengthen parliamentary scrutiny of the consolidated accounts, and I have provided this report to support your process. The consolidated accounts are a critical component of the Scottish Government's accountability to Parliament and the public. They cover over 90% of the spending approved by Parliament each year and show the amounts that the Government spends against each main budget heading. They also show the assets, liabilities and other financial commitments carried forward to future years and contain an annual report in which the Government gives a high-level account of its activities and performance. My independent opinion on the consolidated accounts is unqualified. That means that I am content that they provide a true and fair view of the Government's finances. Beyond that, convener, I would like briefly to highlight four areas from my report. First of all, on financial management and reporting, the majority of the budget approved by the Scottish Parliament relates to spending programmes and administration costs covered by the Scottish Government's consolidated accounts. The Government managed its budget for 2014-15 within the overall limit set by the Parliament. The accounts meet the legal and accounting requirements. They show the financial position and budgetary performance from the perspective of the Government's role in managing the budget that it controls directly. However, it is becoming increasingly important to also understand the overall position of the devolved Scottish public sector as a whole. I have previously highlighted that there is no single set of accounts that shows that. That means that it is difficult for the Scottish Parliament and for taxpayers to get a full picture and understanding of the longer-term implications of public finances. It remains firmly in my view that the case for enhanced reporting of Scotland's public finances has never been stronger. Accounts for the whole of the devolved public sector would complement the Scottish Government's own accounts. Secondly, on corporate governance, a governance statement prepared by the permanent secretary is a key feature of the consolidated accounts. That statement summarises how the core organisation is controlled and directed. In my view, the overarching governance arrangements in place during 2014-15 were generally affected and provided an appropriate framework for organisational decision making. Thirdly, performance. As I indicated, the consolidated accounts contain an annual report that summarises financial performance for the year with particular emphasis on performance against budget. It also signposts where more performance information is available and refers to the Scottish Government's national performance framework. The Government has been building on its arrangements to better report how it is directing resources towards its desired outcomes and the impact that this is having. In my view, a more rounded account of the Scottish Government's overall performance as part of an expanded annual report would enhance this reporting and help to strengthen accountability and scrutiny. Fourthly, convener, the other significant issues that I highlight in my report are threefold. The continuing risk to the common agricultural policy futures programme, the suspension of European structural funds programmes, which provides financial support for improvement and the Office for National Statistics classification of non-profit disputing projects and the potential implications for capital budgets. Overall, the Scottish Government has a good record of financial management and reporting, governance arrangements are generally effective and the national performance framework is well established. Together, those forms are strong base to meet the challenges of tighter budgets and increasing financial power. My audit work has identified a number of areas for improvement from that base and we will continue to support the independent scrutiny of Scotland's public finances through all of our work and through this committee. As always, convener, my colleagues and I are happy to answer the committee's questions. I thank her to the general for what the statement can and move straight to questions and move to Mary Scanlon. I was quite surprised in paragraphs 34 and 35 that Scotland still does not have a balance sheet. We do not know our income, we do not know our expenditure, we do not know our pension liabilities in the public sector and I think I've raised this before with you but I certainly have a serious concern about local government debt in some way that has to be recognised. If you'll forgive me, convener, we've been through a referendum campaign and deliberations about Scotland's balance sheet were very pertinent to that campaign. We're going to be facing a referendum campaign sometime in the future. After nine years of a Government that's looking for Scotland to stand on its own and to have its own balance sheet and to be financially and otherwise independent, after nine years, why don't we know what Scotland's income and expenditure is? I think that one of the main messages of my report, Ms Scanlon, is absolutely the need for that overall picture of Scotland's public finances. Having a picture of what both the liabilities and the assets are helps this Parliament to make better decisions for the longer term and will help taxpayers and citizens across Scotland to understand the risks and the opportunities that we face. The new financial powers that are coming to the Parliament under both the Scotland Act 2012 and the new Scotland Bill mean the importance of that information is heightened. I understand that the Government has accepted in principle the need to develop a more comprehensive picture and what I call for in this report is now a more detailed plan and time scout scale to take that forward as a matter of urgency. It's all due respect, Auditor General. You have called for this before. I've been reporting on this since July 2013, I think, which is why I'm now looking for a when would you expect to get that information from the Government? I think that you're right, it's not just politicians that want to see it. I think that Scottish taxpayers have a right to see that information. When would you expect it and why is there the delay? I think that the question about why there's a delay is when you might want to post to the permanent secretary when you take evidence in December. My view is that it becomes increasingly urgent with the new financial powers that are coming to the Parliament, as we speak. Absolutely. My final, I'll just put the two questions together. The European funding common agricultural policy, we're about to discuss ICT, but it's now three times over the budget, £62 million and the forecast is £178 million. I quote paragraph 50, there remain significant risks to successful delivery, not just now, but the risks will remain until full implementation and beyond. Just my final question, because we have talked about this before and an update would be helpful, but I was very concerned about paragraph 55, the robustness of information being retained by some grant recipients about how ESF funds were being spent. Is there likely to be a clawback of funds? Are you implying that your language is always very polite? Are you implying that funds have not been spent on what they were drawn down for? I wonder if you could give the committee a little bit more clarity on that issue. Certainly, Ms Scanlon. You've asked about both the CAP Futures programme and the CAP Futures months. I'll ask Mark to pick up the CAP Futures piece first, and then you can come back on the site. On CAP Futures, as you've said, Ms Scanlon, we've brought information to the committee before and our intention is to bring a report in the new year about how the progress of the system is going. We've identified previously and we continue to have concerns that the project is facing significant risks. The Government recently set out its timeline for payments, and we hope that arrangements are in place to make those payments. Is that by instalments? We'll stay close to that, and we'll report to the committee more generally in the new year. How significant are the significant risks? I think that there are two issues that the committee will be aware of, but just to confirm, there are issues around delivery and value for money of the project itself in terms of how quickly systems can be put into place and how effective those systems are and the costs and the management of the project associated with that. The committee has had an on-going interest in that area. The other risk is that it is important to get those systems into place so that the Scottish Government can demonstrate to the European Commission that it is following the rules that it needs to follow. A real test of those systems, as well as making payments to farmers, are the way in which the Government is able to demonstrate that it is following those rules and has the appropriate control systems in place. As part of our wider programme of work, we have a responsibility once payments have been made to look at those controls and to report on those controls to the European Commission. I know that other members want to commence, so I'll leave that one just now, and if I could just get a response on the ESF funds. On the structural funds, it's right that we're highlighted at this area. There's a substantial amount of money flowed through from the European Commission on this side of things as well, something of the order of 81 million pounds in the 1415 accounts that we're looking at today. The situation is that there have been interruptions in the past and that's quite a common occurrence across the schemes across Europe. What we're reporting here is an escalation to this category called suspension. In answer to the direct answer to your question, really, there is uncertainty about what the implications of this situation are. In the interruption situation, the managing authority with the Scottish Government can actually make a self-correction of a relatively small amount that can be recycled through the process. In the case of suspension, the managing authority Scottish Government has to do a lot more, there's a lot more tests for them. They have to, for example, produce an action plan of how they're going to resolve matters. The reason I explain all that is just to underline the uncertainty, because at the moment that action plan is now with the EC, they will consider that and then we'll decide what to do after that. It's got a range of options available to it, including the self-correction type of situation that I mentioned, but also they have an opportunity to apply penalties to the Scottish Government. I very much emphasise that that will take some time to come through, and even if our penalties are suggested, there will be some negotiations between the Government and the EC about what those penalties might be. However, there is a serious situation and it's something that we want to highlight here. So are there any particular projects that you can tell this committee today where funds have been accessed through the ESF, the European Structural Fund, and they have been misused? Are there any situations that you'd like to share with us today? So if I go down a level into a bit more detail, what happens is that audit work is done on the individual projects and what they look at are things like the quality of evidence that supports the expenditure, the procurement rules that have been applied and what they do is, on basis of a sample, come forward with what they call an error rate and it's those error rates that then determine the action that's taken. Has the error rate increased in recent years? It has and that's one of the reasons why we go from this escalation from interruption to suspension. That would be the mismatch between what the funding was for and what it was used for. That's right, exactly. Then there is a discussion about what those error rates actually mean and it's that that applies to the amount of money that has to be either self-corrected or perhaps through penalties, but very much the error rate. So it's against the sample. I'm not avoiding a question about individual cases because I couldn't name any today, but I just wanted to give you a sense of how the process works and how we get to this situation with our concerns about the funding. In general, the report, as you might expect, is a fairly good one for the Government, with a few questions coming out of it. The cap futures, the figures that you've given here, they haven't changed since your last report have they? They're still the same figures. If I remember correctly, you were going to be coming back to us at some point on this. When is your next follow-up due? I'll ask Mark to give you the detail on that, if I may. So there's two critical dates. The first date is the one that Mrs Scanlon alluded to, which was the initial payments to farmers and the Government's intention to get as many payments out the door in December and from December. Then there's a hard deadline at the end of June 2016, when all payments have to be made under European rules. Our intention is to come and report back to the committee in more generally between those two dates, a period in which we've got real evidence around what progress has been and we're able to comment on the Government's overall progress, but in advance of the 2016 date. One of the things that we'll need to manage is the timing of the election when we can report around that, but we set out in this report that in a general sense we want to report in the spring of 2016. Just turning to the report here, I'm looking at paragraph 29 on page 9. I was quite surprised to see such a large figure for NHS clinical and medical negligence claims, 302 million. Does that directly link to a potential liability or is it just a pot that they've got with case? It relates to the scheme that is used to manage clinical negligence across the NHS as a whole, and it's always one of the largest provisions within the accounts. As always, I will ask Mark Org Gordon to pick up the detail of that to keep you straight on it. So the way in which the provision is an estimate of the amount that's liable to be paid out for cases, for medical cases and clinical and medical and educational cases that have already been brought against NHS bodies, and there's a well-established process that's managed through the central legal office in the NHS to assess, to risk assess each of those cases and put a probability essential in each of those individual cases and assess the amounts that may be payable under each of those cases. That allows the Government overall to prepare an overall estimate, and I'll stress it as an estimate, but this is their best estimate of how much they expect to have to pay out over time in relation to the cases that have been raised. So this figure isn't an annual figure. It's an accumulation of potential liabilities that are in this pot. So it's a balance sheet figure for us exactly that. It's the current balance, and it's built up over a number of years, and will be met over a number of years. Approximately how many cases are there? Just ballpark. So I'm afraid I don't have that information. It's just out of interest. I mean, £300 million to me is an awful lot of money. As Marcus said, it is an accumulated figure of all of the cases across NHS boards across Scotland. It's audited at two levels, both at the level of the Scottish Government's balance sheet and at the individual boards, but we don't have the figure of how many claims is in there to hand at the moment. Just starting to paragraph 35 on page 10 about pension liabilities. In recent years pension liabilities have become a real problem because of changes in accounting and so on, and what the actuaries are now, how the actuaries are actually treating some of the funding. Is there no feel at all for what the figure is nationally? I mean, I know that, in a small way, I'm involved with some local trustee, local trusts, and they are crippled by the cost of pension funds. You're absolutely right about the scale of the liability, and of course there has been action taken by both the Scottish and the UK Governments to try and manage that liability over the longer term. I'll ask Gordon to give you a bit more about the figures that are available and what's not here in Scotland. It's right that we've set on this, and in fact it's a very good example of why we think across the whole of the public sector that we need that type of information available in a transparent way so that informed decisions can be made. Most recently, when we've had access to audited and good quality information, we've included a figure in the report back in July 2013 on developing financial reporting, where we were able to do that calculation based on audited information, and at that time the accumulated amount of liability was £66 billion, so it's a substantial number. Is that just for Scotland? Yes. Thank goodness that it's not likely to become liable any time soon. The consolidated accounts, the value of the assets, has been increasing over the years as a result of capital investment, but you say that the liabilities have stayed broadly consistent. Why is that? I would have thought that the liabilities would have edged up proportionally with the assets. I think that the asset increase is largely to do with capital budgets being applied and expenditure through the NPD programme and similar programmes, and what that does is it increases the amount of public funds that are invested in assets that will have a continuing benefit, and that's what the asset balance measures. The liabilities are largely but not exclusively independent of that, and that's the sort of things that we highlight in the report in terms of the general business of government and the organisations that are part of the consolidated account, how those liabilities are established. An important part of the overall picture is to understand some of the individual trends within those liabilities that have been highlighted by the clinical medical and medical surgeons in one of those areas. We've also highlighted issues around provisions, for example, and there's an understanding of what's happening, both at the headline level and within the individual balances. Again, we think that through good reporting around the balance sheet, there's an opportunity to have a greater understanding of that. We can ask a couple of questions. The first is, again, on power 29, early departure costs are £155 million, presumably that's not just John Boyle's two others in there. Secondly, I wonder if the Auditor General could just clarify in 38 your point about the government need to come up with a clear plan and timescale on a single set of Scottish accounts. Is it for the government to produce that single set of accounts, or do you have a view as to whether it should be the fiscal commission, or should it be, as it were, ultimately independently produced to allow the very open transparency and scrutiny that you were describing in your earlier remarks? I absolutely think that it should be the Scottish Government that does it. I think that there's a useful parallel in that the UK Government for a number of years now has produced UK hold of government accounts, which carry out that consolidation and indeed includes the Scottish elements in there. What we don't have is that picture at a Scottish level, and I think that it's increasingly important that we should have that. The £155 million early departure? £155 million is the, it doesn't just relate to Mr Doyle, and it's the figure across the accounts which are consolidated to the Scottish Government's consolidated accounts at the moment. It is a large number. Has it gone up? I don't know, I'll see if Mark can add to that. I would put it in context though and say that we have been at a time of reducing the scale of public services, and there is a cost associated with that. That's it. Thank you. Thank you, convener, and hello again. I want to say general. I'd just like to pick up on the balance sheet and the information that Spice has given us of the background, hopefully produced. It looks as though the assets, two thirds of those are the road network and a substantial other part of that is buildings. Given that one of the on-going problems that the NHS has is actually valuing its own buildings so that it can balance its books, that's something we'll explore again soon. Are you comfortable that those valuations are meaningful? I've no doubt they're professionally done. I'm not doubting any of that, but what assurance can we really have that even the buildings aspect of that is really realizable if we have to? I will ask Mark my expert on those matters to respond to the question. To confirm that we have confirmed that they are professionally prepared and appropriately referred in terms of the question of meaningfulness, what those estimates do is they essentially estimate how much would it cost us to replace those buildings and how much would it cost us to replace those road networks and bridges. That's the fundamental basis on which most of the assets, not all of the assets but most of the operational assets in the accounts are valued. If they disappear tomorrow, what would the cost of putting them back into the current race state of repair be? I think that that is meaningful to give a sense of the investment that's been made previously in those assets and the value to the public sector. They're not really assets in any realizable sense nor does it value what you might be able to get as income if you were to part with them to somebody else. It's actually a shadow liability for what it would cost you to replace it. I don't know if I would recognise the phrase shadow liability but it would be the cost. Yeah, I mean it's no recountant word but I think you've got a point. Essentially, and we make clear on the report, only those assets that are declared a surplus, they get valued on a different basis, which is essentially how much those assets are being actively marketed and that's an estimate of what those will realise. You'll see from the report that we think there's 42 million from memory that the assets. So the bulk of assets have been built, have been established and continue to be used for public services. Can I just start about that very briefly as well, Mr Don? It's worth noting, as we say in the report, that because there is no single picture of the overall assets and liabilities for Scotland's public sector, the figure for assets isn't complete. Probably the most obvious example of why that doesn't quite make sense is the roads network, where the national roads network is on the consolidated accounts balance sheet. A large chunk of the roads network is the responsibility of local authorities and it's on 32 different balance sheets valued on a different basis. So there's a real need to pull that together and get it done. Thank you for pre-empting my next question. I suppose the same thing applies to PFI in respect of schools and hospitals, that one is on the national balance sheet and one is on the local balance sheet. Local authority assets and liabilities are, for good reasons, on the local authorities' own financial statements. NHS assets and liabilities are within the consolidated accounts here, but we don't have that overall picture of them. The sum on financial liabilities, one of the largest things, is of course PFI. That will be a figure that, in one respect, in terms of the early PFI contracts and even some of the PPP contracts, we'll be reducing but, of course, we'll be being added to by new NPD contracts that are coming along. Do we get a sense of that increasing, decreasing? The reports that I've published on developing financial reporting have included a graph that shows by year the pattern of committed liabilities, which is in place. As you'd expect, it moves up towards a peak in around the early 2020s and then starts to trail off, but it is added to as new commitments are made. I want to ask about financial assets. The largest financial asset is the student loan sum £2.685 billion. What are the risks associated with that? Have you done some calculations as to what the collection of those loans and how much of it is likely to be collected and how much is not? That's a particularly complicated area, and I'm going to ask Mark to do his best to talk you through it. Thank you, Auditor General. Sorry, Mark. The way in which that liability is estimated is on collectible debt, so that is the Government's estimate, and we are happy with that estimate that that amount is currently collectible, and there are provisions against non-payment of debt in that estimate of that amount. The £2.685 billion is excluding a certain amount. Do we have a figure for that? I don't have a figure for it, but it's just to give a bit more depth to that. There is modelling done, which looks at a whole range of things, including the profile of people who still have amounts outstanding, their income, their likely income and that type of thing. We do a lot of work around about that model to satisfy ourselves that the figures that are brought forward by Government, including the accounts, are materially correct, so there's a process for doing that. Do we have a figure annually for the amount that's being written off for whatever reason? Yes, it's in the accounts. There's a movement shown in the accounts for that. One other question, convener, is about on and off budget again. The ONS, of course, with the ESA 10 issue, is looking at the possibility of assets coming on balance or off balance, and that's holding up a number of projects at the present time. Does that have any effect upon the consolidated accounts? That's actually, for again complex reasons, an issue that affects budgeting much more than it does financial reporting. I'll ask Mark to talk you through it. The question of whether assets are on balance sheet or off balance sheet is one for the accounts, and generally the answer to that question is that they are on balance sheet and those assets are recognised in the accounts. As the literature general says, the ONS issue relates to the way in which budgetary control is currently applied and how much it is spending controls. The accounts themselves, in effect, already adopt an approach that ONS is moving toward. Has the effect of the problems with police in terms of centralisation and VAT and the rest, and the colleges now being announced as being on balance sheet and not off, do they have any effects? I mean, they're separate issues, but— So there's a whole bunch of questions in there, which essentially is that those bodies currently fall out with the consolidation boundary for these accounts. The extent to which the accounting for those issues applies to those bodies lies out with the consolidation framework. Again, to come back to one of our central points, as a wider set of accounts, would wrap those over at one place. I think that that makes your point even more, and that's three or four times that's been made. I think that it needs to be addressed urgently. Thank you. I found the report to be very useful once again, and there's certainly something in it for all of us around the table. Clearly, you have been complementary in terms of what the Government does, paragraph 60, regarding the national accounts classification, and the Scottish Government has applied the credit accounting treatment and preparing accounts, but clearly that is the issue of the ESA 10. In paragraph 64, where you highlighted the Scottish Government's company's discussion with the HM Treasury on the contingency arrangements, are you aware of how those are progressing? That's the question that you would best explore with the permanent secretary when you meet next month. Finally, it's paragraph 67 in the conclusion where you highlight not the standing issue of the balance sheet that's been raised here today. You highlight at the very beginning of the paragraph that the Scottish Government has a good record of financial management and reporting. Governments arrangements are generally effective and the national performance framework is well established. Certainly, would you be content that any additional powers that are to come to this Parliament via the current Scotland Bill with the arrangements that are deteriorated at the moment that there is a good framework to build upon? Obviously, some additional reporting mechanisms would be required as a consequence of those further powers. I think that I should start by being clear that I'm focusing on financial reporting here, and there's a much wider framework to be agreed around the new financial powers. However, my conclusion is that what we have in place currently on financial reporting and performance reporting provides a good basis. I've identified a number of areas where improvement is now urgently required to underpin those new powers and the decisions that the Parliament will have to make about them. I thank the Auditor General on the team for the evidence. I will be considering the evidence received today in agenda item number 5 in private. I move to agenda item number 4, which is a response from the Scottish Government on the AGS report entitled Managing ICT Contracts in Central Government and Update. Do members have any comments? Mary Scanlon? Yes, I have a comment, convener. I remind you that prior to our current Auditor General, her predecessor, Bob Black, raised IT as one of his most serious legacy issues. That was over four years ago. To be honest, I'm not impressed with the response that we've had from officials. I think that we just keep thinking that something is going to be done and it never is. Today, we have been looking at the common agricultural payments that are already three times over the cost and significant risks. Last week, we were looking at NHS 24, the IT system that appears to have collapsed. Without outlining any more problems, I suggest that instead of always listening to officials. I spoke to an IT company last week and they told me that, on the Government's procurement list, there are 15 companies, one of which is a Scottish company, and that the Scottish IT sector gets 4 per cent of the public sector spend. I suggest that we ask in representatives from SMEs in Scotland and a larger company to try to get a better understanding of why that continues to be a problem. In my time on the committee, we've never taken evidence from a company. We've only heard what officials and cabinet secretaries have to say. I suggest that, convener, on the same day as the permanent secretary's attendance on 9 December. That's the only way that I would have some sort of insight and it would enable me to help, hopefully, to understand what is happening in IT in Scotland, because it's huge amounts of public money going on IT systems rather than the front line of public service. I understand where Mary's coming from, but I'm not sure what we'd ask these companies, because they don't know anything about the Scottish Government's systems. I think that it's going to be a very difficult one to get somebody in for and to get meaningful evidence from them. I'm concerned about what's been previously stated, which is the multiplicity, the bureaucracy, the different layers that have been put in place in a knee-jerk reaction to try to manage that. That cannot be efficient. We need to pursue that piece of it. The bigger picture about IT raised with the permanent secretary, I think that we should be specifically targeting what we now know as a problem. Exactly the questions that it would be really good to put to some businesses, because they will be very well placed to answer questions about the Government's procurement mechanisms and whether they're good, bad or indifferent. The company that I'd like to have in is the one that spent £178 million not delivering farm payments. It may be the view of the convener that that's not for now because that process is still under way, but if ever there's a company that deserves scrutiny, both I suspect from the Government's point of view but also from Aldous Scotland clearly doing that. More to the point, from the committee's point of view, it's that particular example because it's so far of a budget. Richard Simpson, I would add to that the NHS IT because that's massively over budget, been delayed three years. I agree with Colin's point about the structure. I did raise it at First Minister's questions and asked the First Minister to look at it because it is just grossly over complicated. I have two other issues. One is that there is a requirement in some of the procurements quite rightly that SMEs are given some of the subcontracting work. At least in one example, a significant SME was promptly taken over by the central company and therefore the SME's delivery was then effectively nullified. The other thing that I've discovered—are we in public session? Yes, we are. We are live. We are live. I don't want to get into that. At least I'm laughing. It's the main colleagues that are in public session and I'm looking for them. I will anonymise the contract, at least in one other very major contract. The two bidders for the contract, one won the contract and then promptly subcontracted to the loser. I find that extraordinary if the main contractor was unable to deliver without going to the subcontractor. Who's making money out of that? There's something very wrong with our procurement system. Colin, can you remind us just before I show them on that this is about where we actually go after receiving this response? I take it that the colleagues are concerned that the response doesn't meet the expectations. Absolutely. There is the option if we are looking to attack businesses to come in and speak to us about the round-table approach that all our committees have done. I do. It could be that—not this side this year but maybe next year—earth before the committee finishes for the Scottish Parliament elections that we have a particular session to look at that with the round-table discussion. That deals with the management of what's quite a difficult issue to deal with. The proposal is that the permanent secretary would be coming in the next session, I would suggest, along with the chief information officer, and allow the Government to respond to the ICT document that's been laid before us by the general and in a later stage that would be the committee's position to do a round-table discussion. I've got Stuart McMillan and Elbrian Nigel Donne. Thank you, just a brief point. The concerns that have been raised by colleagues, I forget a huge amount of sympathy for, but I think we also have to recognise that when it comes to ICT contracts and the delivery of them, unfortunately ICT does move at such a pace. It's something that I've said on the record in this committee before as well, that when you actually ship a box out of a factory, it's already out of date. One of the areas of concern that I have raised in the past as well, and I'll do it again today, in terms of the changes of specifications, some specs might actually change whilst the project's under way. We're sitting in a building and that did happen. I think that's a point that really does have to be considered when we are actually looking at this further. Thank you. Because you're so many colleagues, we're actually just talking about how we manage this, so we can actually get into those details if we do a round-table discussion. I'm entirely with colleagues who want to talk to the people who are actually delivering, but I'm also very conscious that there will be commercial limitations on what they feel they can say, and it's extremely difficult in the real world for contractors to talk about their position with potential suppliers of further contracts. I'm just wondering whether there are academics, for want of a word, who have got some understanding of this. Maybe we're talking about consultants rather than academics, but people who are not directly involved with this contract or any particular contract. Can I just try to bring those to the close, because we could talk about this. But I think that there are people who might be able to give us unbiased advice. Can I just suggest that the clerk will come back to us with paper, in terms of how we can deal with our round-table option. I think that Nigel's point is very good. None of us are experts in this field. It is a very complicated field. No one's got it absolutely right, frankly. I think that we do need an adviser on this, and I have a name to suggest to you. That is the paper from a clerk, first of all, and then we can discuss how we take forward. Is that agreed? Thank you, and does it agree previously, always? We can move into private session.