 I welcome members of the press in public to the 16th meeting of the Public Audit Committee in 2015. First of all, I will ask all those present to ensure that the electronic items are switched to flight mode so that they do not affect the work of the committee. Colleagues, can I move on to agenda item number one, which is the decision to take business in private? The question is that we take agenda item number three in private. I will agree. Thank you colleagues. Can I now move on to agenda item number two, which is oral evidence on the AGS report entitled the 2013 audit of Coltbridge College, the governance of seven-inch arrangements. Perhaps as an opening statement colleagues can just confirm that all evidence will be in public. The committee expects witnesses to answer questions to the best of their ability and should the committee deem it necessary, I can advise the committee that we may recall witnesses to follow up in any matter that arises during the evidence-taking. All the people from whom the committee is scheduled to take evidence at this meeting and future meetings are here at the invitation of the committee. Can I confirm that we welcome assurances that we have been given that nothing said in evidence will be treated as breaching any confidentiality agreement? We have correspondence from the successor college to Coltbridge College confirming this. I just advise that it is very important that witnesses are free to answer questions that we put to them. However, I would like to point out that when any witness refuses to answer a question, then we do have the option of formally requiring the witnesses to return to answer our questions and no circumstances that any person who has been required to attend to provide evidence refuses or fails to answer the questions, then they may be guilty of an offence. Can I welcome our first panel of witnesses? We have this morning Lawrence Hills, the chief executive of the Scottish Funding Council and John Kemp, the director of access skills and outcomes agreements for the Scottish Funding Council. I understand that Lawrence Hills has a short opening statement to make. Thank you very much, convener. I thank you to the committee for the opportunity to provide evidence on the section 22 report on Coltbridge College. As the Auditor General report shows, we were concerned at the time about the approach being taken by the Coltbridge College in terms of the voluntary severance arrangements to the senior management team. We were very active in expressing those concerns to the chair and the principal of the college and indeed the whole board. As the Auditor General's report also says, we put those concerns in writing. We met with the chair and the principal and I took the rarely used step of exercising our power to insist on addressing the college board meeting. I wrote to the chair of the college on 24 October 2013 asking that the college should not commit to the deal that was proposed to the principal until it had provided us with assurance and that the arrangements were in accordance with good practice and represented public value. We were therefore dismayed that the college went ahead with this deal anyway. We considered the scope for legal action to be taken to recover the money that had been spent and, having taken advice, concluded that the prospect of successful legal action was remote. We also considered whether we should withhold funding or financially penalise the college after the event and concluded that, in this case, since those who had been involved had moved on, any financial penalties would simply damage the new college and impact on staff and students of new college Lanarkshire. Within the powers available at the time, we could not prevent the college from board from taking these decisions. However, since April 2014, all colleges are now required to seek approval from SFC before taking such decisions. These new arrangements greatly reduce the risk of similar situations arising in the future. We are not complacent, of course. We need to be mindful of how we operate those powers and how we learn from the lessons from the events that are reported in the report. I will be happy to answer any questions that the committee has. Can I just open questions to Mr Halson for some clarity on some issues that we should put on record for the committee? First, can I confirm that you are the Accountable Officer for the Scottish Fund of Council? Yes, I am. And you are responsible for funding that is required that is provided to you for £1.5 million per year? Yes. Can I confirm that your salary is within the bracket of £110,000 to £120,000 per annum? Yes. So, as part of that, you have a significant responsibility to ensure the best use of public funds, is that correct? Yes. So, in terms of this allocation of funding to Copebridge College, ultimately you are responsible for ensuring that best value? Yes. So, can I ask you then, in providing those funds to the college at any time where you are concerned that the allocation of those funds for the mergers process may have been taken forward outwith the parameters that were set to them in respect of the severance payments that were to be made? We, as you can see from the evidence, were very concerned that the payments will be made. We weren't within the guidance that we provided that the proper processes hadn't been made by the board to evidence that they were valued for money and that proper records weren't kept. So, yes, we were concerned, however, it was within the perfect... You asked the college to stop making the payments. We said you were concerned, but did you at any time say, no, you can't make this payment because it's beyond the parameters that we've set out? We would ask you not to do that. In my letter to the college on the 24th of October, I asked the college not to commit the deal that was proposed until they provided certain assurances. So, can we confirm those assurances then? Because those assurances were, yes, please ensure that this is passed by the external and internal auditors, is that correct? And you said that you would only commit up to 13 months salary. But what you did say was it was the decision of the board themselves if they wanted to extend it outwith the parameters of the 13 months, is that correct? Yes, provided that they could evidence that they've done that through a proper process and that they've got... So, what would the proper process be then? The proper process would be for the board to consider a business case for them to... So, what would the business case say? The business case would need to show that there was a good value for money reasons for... If you give me an example then of where you could have foreseen a situation where the board may have reached a conclusion that said, yeah, this is best value for money, and yes, we should pay this amount of money because for all, I mean, for all we know, there could have been that case made. So, what you've not said, please do not provide this because this is well outwith the parameters. What you've did is you've waited until the decision's been taken and then you've said, but we've pretty appalled that it's the decision. What are you appalled at? What concerns you? Well, let's be clear. The reason that we... I'll bring you in a second, but I'm asking Mr Howell's answer to that question. Indeed, we were clearly concerned about the arrangement that was being made. It was, however, for the college to make that decision. They needed to justify it. It's clear from the correspondence that we did not see that we had heard any justification for that. Nevertheless, it was for the college to do that. And within the powers that we had at the time, we acted as far as we could do. So, when were you advised that... And this is a question for Mr Kemp, because I can see from the exchanges of correspondence that you've involved Mr Kemp in this process. When were you advised that the Bax payment was made to Mr Doyle? What date? I think it was the 25th of October. The date we had appeared at the board on the 23rd, we followed that up with a letter on the 24th, and we were advised by the then-chair, the incoming chair on the 25th. So, you were advised in the evening of the 23rd that this decision had been taken to increase the payments? We were not advised on the evening of the 23rd. We attended the board and made a presentation to the board. The board did not tell us on that evening what the outcome of the discussion was. When did you find out? We followed that up with a letter on the 24th, and we found out... So, you did not phone the college. Given our concerns, you were, Mr Kemp, did you not phone the college to say what decision did you take in respect of them? We made several attempts to contact Mr Gray to find the outcome of the meeting, but the eventual response that we got was from the incoming chair, Tom Keenan, on the 25th. Did you call the college in the following day to say, yes, I heard there was a good board meeting last night? Did anybody advise you what happened at the board meeting? You did not hear from anybody to say that the decision had been taken? We did contact the college on the following day, but the main contact was with the chair. Nobody in the Scottish Funding Council was aware of this decision? We were attempting to find out what had happened, but we didn't... I was not at the board meeting, but Lawrence and my colleague Sharon Ryse, they were there, made a presentation, and the decision was taken... I think that part of the decision was taken in the remuneration committee prior to the board meeting, and then they went at present at that discussion in the board meeting. We followed up the following day with the then chair, but he had stood down at that meeting and did not respond, and we got a response from the incoming chair, the following day. And the back's payment was already made by that point? Yes. So it was actually in Mr Dahl's bank account, or was it being processed? I couldn't say whether it was in Mr Dahl's bank account, but... The reason for my questioning on this is that we've seen legislation that's been... The minister's taken forward recently in respect to Clyde College. Is that something that was considered in this instance? You're obviously concerned. There's issues of the governance across the whole year in respect to this college. This is not something that just popped up on that particular month of October. Throughout the whole year from your exchanges, obviously you were concerned that there may be issues of governance. Did you not think that possibly you could use the legislation that the minister has effectively used recently at Clyde College to say, yeah, we're closing down the board and we're going to reappoint you board members and ensure that this process is carried out properly? It's worth saying that the timing was that this was first discussed by the college in January. Absolutely. Now, we... They had sought advice from the funding council, and we wrote to them on the 24th of January with the advice that you've seen. We were not aware that they had not taken that advice until October, because the advice... So you had no issues about governance, so you were happy with governance at Coatbridge College for that entire year. From January to October, you had no concerns, because that's not what your correspondence is. On the issue of the severance, we had no indication until early October that they hadn't taken the advice. So was that not at the point when you could have approached... Did you ever approach the minister and say, I'm concerned about what's going on at Coatbridge College, Mr Hulls? We didn't approach the minister. We kept to Scottish Government officials informed of the process. We kept them informed of the process in relation to the merger, generally, and in terms of the development... Did you see you were concerned about the college? I couldn't say that we said we were concerned about general governance of the college. We were certainly concerned about the progress of the merger, and we were certainly concerned about the sense of purpose. You wanted Mr Dahl to move on, didn't you? Did you want Mr Dahl to move on? Was he getting in the way of the merger process? No, we wanted a successful merger for that next year. We wanted that to be done well, and we wanted that to create the college we wanted. It was for the different parties to decide at the end of the day who would be the principal and how that would come about. Our main primary concern remained what was the best way to organise college education in that next year. Mr Kemp? Yes, I concur with that. I mean, the concerns that we heard about Coatbridge College between January and October were about the progress of the merger. So there was no issues of governance at all then? I can just ask you the final question then. Obviously, and I can see this from your exchanges, which, you know, you would argue are pretty robust. So you're saying, getting sure that this deal is agreed with the external and internal auditors? Yes. So I take it, did you contact with the internal and external auditors during this process? Is that something that you would do? Mr Kemp? My recollection is, and I would strike, we can follow this up in writing, is that one of my colleagues did contact the auditors, not just of Coatbridge, but of other colleges on this guidance. So that's what's written into the guidance of the Scottish Funding Council in 2000, but is that such arrangement should be passed over to the external and internal auditors. So I put the point to you, should you not have contacted the external and internal auditors to make sure that these deals are agreed by you? Is it your understanding that these deals weren't passed across to the external and internal auditors? Well, clearly, the external auditor picked up, as a matter of emphasis, in the report. But where are they aware, in terms of your arrangement, or the contact that you've had with both auditors or what your experience is of this issue? Where are both internal and external auditors aware of the seven agreements that were being proposed? And where are they passed by the auditors? Because that's what Mr Howell says in his correspondence, as he wants to ensure. Our guidance is that the process is that they should make a business case and pass it by the auditors. No, I don't think they did, not at the time. So they weren't made aware? We could... Surely you would know that. I mean, a surprise has made it, you wouldn't know. No, we asked the college to assure us that they had got those assurances. But would you not follow up and say, well, listen folks, we want to make sure... We'll actually contact the external and internal auditors and make sure that what the colleges advise is on this serious amount of public money, that six significant six figure sums, we want to ensure that the external and internal auditors are happy with this. Indeed. Well, I guess we should... I mean, that is a thing where, well, maybe we could have done more to talk to the internal and external auditors. At the time I wrote, I was asking the college to assure themselves and to talk to the internal auditors. And I asked them to explicitly report that back to me. That didn't happen. The board went ahead and made those payments. Two final questions. Could you have stopped these payments being made to the college? Because that's what the Scotland have told me. Could technically... We could have stopped payments being made to the college by us. But we couldn't, as far as I'm aware, have stopped the college making payments to Mr Doyle. We could have though, if he'd intervened in the way in the ministers intervened at Clyde College, or couldn't he have? Why would you not have done that? The process for what has happened at Clyde College was a fairly lengthy one. This took place over a couple of weeks. It took place over from January to October. You had concerns. You can see it from the exchanges that have taken place. You didn't have a... It's taken over a couple of weeks. Is it still not of such a concern to you? You said you're appalled at the decision that was taken to award the severance payments and to enhance them. So surely during those couple of weeks you could have said, well, sorry, minister, we're really concerned at this. What do you take in there and carry out the legislation, legislative measures that allow us to take over this board? It's important to be right on the timescale. We gave guidance in January on the severance guidance in response to requests from Mr Gray. We had no indication until early October that that guidance had not been followed. We did not see the minute of the remuneration committee in January until October. So for that intervening period, while we had concerns about Coatbridge being in and out of the merger and the progress with the merger, we had no indication that there was an issue about the way they were dealing with the severance guidance. On the issue of whether the powers that were used in Clyde College could have been used here, the upshot of the issues at Clyde College where the board were replaced, in that case, the chair and the principal were going anyway. Can we just final question to Mr Howells? Should we not—I mean, you know this is a significant process of mergers. You would have known throughout this process that the severance payments would have to be made. Should you not have at the very beginning of this process said, yeah, there could be a potential conflict of interest in terms of the principles dealing with this. And there's every possibility that the colleges could award themselves severance payments well above what we're proposing here. Surely we have to put in preventative measures. I mean, it's a bit like saying to the kids, you know, there's a box of matches, we'll leave them on the table top, but listen, don't play with them, you go away and just leave them to play with them. You can't leave yourself open to this potential abuse. You know, I think you've actually done and you haven't used the powers that are available to you to prevent this from happening. You're not reflecting that? Indeed, I guess we could have— The horse has bolted, hasn't it? The horse has bolted. I guess we could have re-emphasised even more strongly our severance guidance. I guess we could have been even more active in terms of supervising colleges in making these deals. Of course, with hindsight, I would have wanted to do that. I guess I keep coming back to when we were aware of these issues, as you can see from the documentation here, we were very active. I guess my expectation would have been that the board of that college would have listened to that advice, including the fact that I went to talk to the board directly and acted accordingly. Mere Skull? Right, I have two main issues. Given that none of us round this table represent Lanarkshire, can I ask you, first of all, who was in charge of the major process nationally? In terms of the merger process, it was announced by the Government and every party supported it. Indeed. Who was in charge? Were you the accountable officer for the merger process? Yes, it was SFC's responsibility to implement that process. Why did you have difficulties in Lanarkshire? Why did Cotebridge agree to the merger, within a month's disagree, and within six months' later agreed again? What happened there? I think that Dr Camper would be better. Cotebridge, from the beginning, when regionalisation was announced, Cotebridge had been in favour of a merger of all the colleges in Lanarkshire and had said so and come into the funding council and made a case for that, but had done so without consulting with the other colleges in Lanarkshire. So part of the issue in Lanarkshire had been that there wasn't consensus among the four colleges on the way forward and that three of them wished to have a federation. Cotebridge had publicly stated that it wanted a merger of all four, but it hadn't discussed that with the four. By the time that merger was happening, that was after a period. It had been exploring a federation for some time, and Motherwell and Cumbernauld had announced that they wanted to merge, and then Cotebridge had come in because of their previous support for merger. Because Cotebridge came in a month or so after the merger had begun, the other two colleges were quite concerned that they didn't want to go backwards. They had started a process, they had set up working groups, they had made some decisions about the shape of the merger. They didn't want to go backwards on that. Once Cotebridge had joined the merger, there was some friction between the three colleges about the extent to which things that had already been decided should be un-picked because Cotebridge was in. That friction was discussed at the meeting of the merger partnership board in February, and as a result of that, Cotebridge left the merger. I was at that meeting, my view was that the issues were not so significant that they should have led to Cotebridge leaving the merger, and we, in the months after that, sought to bring Cotebridge back in. However, it took some time before an arrangement could be reached that would bring them back in, so they didn't come back in until it was late summer and that they had decided that they wanted to join again. Can I keep the answers more short? I'm just trying to understand why there was friction between the two. The key point is that, while we had a role in supporting the mergers, those mergers were done by autonomous institutions deciding that they wished to merge, and we did not control that in the sense of having a power that was insisting that anyone merge. Lawrence Hiles said that he was in control of the mergers and he was an accountable officer in control of the mergers, so we need to be clear about that. What I'm trying to understand is why they opted in and opted out and came back in again. So I'll just ask you again, were Cotebridge College an impediment to those mergers? Were they looking for something that the other colleges did not agree with, and were the severance payments any part of the negotiations within the mergers? Because I can't understand why 33 senior staff at Cotebridge, none of them were employed at new college. So what happened there? The word takeover, rather than merger, was used. Was that the case? Was there some bad feeling there that led to the severance payments? As they weren't getting anything out of new college, they perhaps thought that they would just go for the severance payments, that nothing to lose. Am I reading this right? I couldn't speculate on why staff within Cotebridge College chose voluntary severance instead of jobs in the new college. Of the senior staff, I think that you're correct, none of them sought jobs or obtained jobs in new college Lanarkshire. However, the issues that led to friction between Cotebridge and Cumbernaug and Motherwell were about the progress of the merger and how the work streams were operated and the speed of the merger. They weren't about voluntary severance because we were not aware of this issue until fairly late on. However, for completeness, once the issue came up as part of the due diligence in early October, it was clearly something that the other two merging partners had some concerns about, because there was an apparent agreement to a particular severance deal, which was not part of the Lanarkshire merger deal and which had left a liability that could, if it had gone ahead for the whole of the senior management— Before I go on to my second question, was there any change in the severance arrangements at Cotebridge College between January and July when they agreed to opt in again? We were not aware of the severance arrangements at Cotebridge. We only found out, as I said, in early October. We had given guidance in January. The remuneration committee had made decisions and deals have been offered. You have taken me cleanly on to my second point. As the accountable officer, Mr Howells, who did you give the guidance to in Cotebridge College to say, stay within the scheme that is being perfectly acceptable for the other colleges in Lanarkshire and do not go above that? Who did you give that information to the guidance that was not given to the remuneration committee? It is several points in the process. We gave that guidance directly to the chair and obviously— To John Gray received that guidance. Obviously, when I addressed the board, I summarised the guidance to them. You were not at the board until October. I am talking about it. Earlier in the process, the guidance has been on our website. Colleges principles have had it drawn to their attention. John Doyle and John Gray had the guidance to keep within the level of severance payments in January and February. It is quite clear from the information that we have got, including the Auditor General's report, that the guidance was not given to the remuneration committee. Is that correct? I am not having been at that remuneration. Well, it is confirmed in the Auditor General's report. I presume that you would agree with that. Can I say, as the accountable officer, withholding information from a committee who is making major decisions on hundreds of thousands of pounds, but what would you use to describe that? The word that I have used is that I am dismayed by that. I am not looking for your opinion. I am looking for the word that would be used. I do not think that that is appropriate. Well, can I tell you what is appropriate? I looked up the dictionary yesterday and withholding information is called deceit. That is the definition in the dictionary. The Scottish Public Finance manual used the term fraud to describe a wide variety of dishonest behaviour, including deception, forgery, false representation and the concealment of material facts. It is usually used to describe the act of depriving a person of something by deceit. The remuneration committee, and I do not want to take all my allocated time, but we have evidence from David Craig and others to say that they did not have the information that you gave to the college. They therefore made a decision to give the principal 30 months or whatever else topping up his salary as honestly as they could, assuming that they were working within the guidance. Those were not dishonest people. They were not giving the information that you gave to John Gray and John Doyle. Do you agree that that critical piece of information that has led to us all being here today was concealed from the remuneration committee and that is why they made the decision that they made. It was withheld, I should say. Withheld? Yes, I think that that is true. Again, part of my reason for attending the board is to make sure that I had spoken to every board member and that they had heard from me. Right, that's it. I'll leave it there now. The convener made in connection with the actual payments. Presumably, there was a transfer of funding from the SFC to the college in order to facilitate the payment. When was the decision taken to make that payment? We would have made that payment retrospectively. It would have been sometime March 2014 that we would have made that payment because those deals were run on the basis of a claims basis. Retrospectively, our £1.3 million contribution would have been claimed by the college. Will you say retrospectively? The events would have happened. The payments would have been made. We would have paid it the following year. So you physically made the payment in March? It might have been. We received the claim in March. We probably made the payment a little later than that. Do you know when, Jim? I'm not sure when we actually made the physical payment, but the claims were the following year towards March, which was later than usual in Mergers. I guess my concern here is that, obviously, you had a lot of concerns about the scheme that was being proposed. It couldn't take place unless you made a payment. It's the timing of that payment that I'm concerned about. Clearly, your concerns are always in October. Was the payment made before that and on what basis, against what business case? We did not make the payment to the college until the following year. That was a payment based on the Lanarkshire voluntary severance scheme, which we didn't have concerns about. That was one that went up to, broadly, a one-year payback for 13 months. We only paid the amount that would be allowed under that scheme. We didn't pay the excess amount in the case of Mr Doyle. However, if you reached a conclusion that there was a problem in October, you would turn around to the college and say, in the circumstances, that it is inappropriate to make the payment, would that have gone ahead? In effect, we told the board that we didn't think that they would create the case to make the payment. We did that at the board meeting effectively. As you heard earlier, they made the payment a couple of days later. We could have retrospectively said to the college, well, actually, we're not going to contribute to this particular item. We chose not to do so, because by that point, a year on, the people responsible had moved on. But you went to a board meeting on 23 October? Indeed. If you had said at that meeting that you weren't going to pay? In addition to the concerns that I was expressing at the time, I could have said, well, I wouldn't pay if you operated a scheme on this basis. I guess I was, at that point, I was trying to say, if you, here's the guidance, please follow the guidance. If you follow the guidance, then you'll have a proper scheme. I was hoping to persuade the board at that point to make that decision. When you left that board meeting, what was your impression of what had been decided? What did you think the board was going to do? You didn't stay for the whole meeting, obviously. Indeed. My impression was that I had been listened to and that my expectation was that the board itself would take that advice and act accordingly. Would you say that there was an issue about the due diligence process in terms of the payment from SFC? Were you satisfied that you were paying against a scheme that was compliant? I would emphasise that our payments were under the Lanarkshire scheme and we only paid up to the amount that would have been claimed under the Lanarkshire scheme. We were happy with the Lanarkshire scheme, which was a one-year payback of the kind that we were supporting, but the payments in excess of the 13 months to Mr Doyle were always clear that we wouldn't pay. That's understood, but I would have hoped that, as part of the due diligence process, you might have taken a more robust stance on that. Do you not think that in retrospect that would have been appropriate? With Hyde sign, perhaps we could have made a different point. Our judgment at the time was that not paying any of the VS would not make any difference to the actions of the college. We had attended the board meeting on the 23rd, and by the 25th, the payment had been made, so any action that we had taken then not to pay even the amount that was payable under the Lanarkshire VS scheme would have only damaged the new college. That was the balance that we were considering in deciding whether or not to pay. Bergen on 23rd of October, if it had been made clear that the payment was contingent on the overall plan being compliant, would we not have been able to avoid a lot of that? It is possible that, if we had added influence, we could have been even more robust at that meeting potentially. We could have added that to the conversation. As I said, my expectation was that the college board would live within the rules. Looking at the correspondence that you had in October and, as has been referred to, some of it is relatively robust, you did not get responses, despite repeated attempts to contact people. Did not that make you suspicious? Did not it make you concerned? Weren't you worried? Indeed, that is the reason for the escalating level of concern and for me insisting on addressing the board at the board meeting. That is an opportunity for me to say to the entire board to make sure that everybody knows what the situation is. Do you have any awareness when they were going to make these payments? No. That was not part of the discussion. Though we had in our correspondence asked them not to commit to the payments. Did they respond to that in any way verbally? No. It was just a silence. They just ignored what you were putting to them. Obviously so, because then action was taken. You talked briefly previously about the guidance that had been issued. My understanding—I think that I have a copy here somewhere in this pile of paper—is a cycle that you sent out in the year 2000. Was that the last time that you sent any sort of reminder around about remuneration? In the case of Coatbridge, the chair had contacted Mark Bathall, the then chief executive, on 24 January. That day, Mark had sent out an email about the guidance, in closing the guidance, with a paragraph that explained what the emerging practice was across the sector about one-year paybacks and so on. In the case of Coatbridge, and in many other colleges, but certainly in the case of Coatbridge, the chair had been sent the guidance and an email explaining how the guidance should be applied and what the emerging practice was right at the beginning of the process. Your expectation was that that would be shared with the remuneration board, and that it would be complied with. Thank you very much, convener. Good morning. Scottish founding council, Mr Howells, is the accounting body and officer overarching to look at the guidance and due diligence of colleges throughout, apart from the fact that it mergers as well. What is concerning me is exactly how you can guarantee the Scottish founding council, how you can guarantee that you are doing your due best diligence to ensure that the responsibilities are carried out properly and intimously. Now, we have heard the fact that you had not heard for a number of months from the college and the mergers. Concerns, you mentioned yourself, actively raising those concerns. Is it part of the funding council's job to receive minutes of all colleges that are going through a merger to go along to meetings? Is that part of your job? During the most merger process, we are involved with the mergers in many ways. Usually, there is a partnership board or something of that nature at which we would attend and we would assist the college to make progress. That is a normal part of how we do business. That is a normal part of your job, but we have heard from evidence and papers and questions also that months passed when you did not hear anything at all. I know that it raised concerns, but it did not raise the concerns enough to go along and ensure that someone was at these meetings or that you did in system receiving the minutes. Just to be clear, the issue on which we did not hear anything for some time was on the issue of whether our guidance on severance had been dealt with by the remuneration committee. We were, during the process of the merger, in constant contact with the two colleges that were merging throughout that period and with Coatbridge, through many attempts to encourage them to reconsider their decision to join the merger. I do not mean to interrupt, but it raises an issue as well. The fact that the only area that you did not seem to have any information on was the severance pay. Did you meet Mr Doyle, the Scottish Funding Council, to discuss the severance payment previous to the board? During the summer of 2013, when Coatbridge was considering rejoining the merger, I did meet with Mr Doyle and had phone calls with Mr Doyle and the then director of finance at Coatbridge College about the arrangements for rejoining the merger. At one of those meetings, there was some discussion about what VS scheme would apply. By that time, the other two merging parties had pretty much developed a VS scheme, which was the one that was eventually used. My advice was—I do recall at least one meeting that Coatbridge suggested that the VS scheme for the merger should be one that went up to 21 months and meet my saying that we are only funding up to one year, and the usual practice in mergers had been ones that were broadly in line with our funding at one year. There were some discussions about the VS scheme for the whole of the merger, for all of the staff. There were no discussions about the VS package for the principal or the senior management team, because we were unaware until October that the Immuneration Committee in January had taken that decision. When you mentioned the fact that you had a meeting and it was talking about the college and the merger, you knew that the VS scheme did come in to play there in discussions that you had with Mr Doyle, and it was raised at worth the 13 months, which was a normal, which was your recommendation, for the merger from other colleges. It was raised then, I presume by Mr Doyle and the finance minister from the college, that they were looking at some other form of package. Did that not raise alarm bells with you basically chasing that part off? The alarm bells that were raised were that they were being unreasonable about what we would fund in the merger, but in the discussions that I had, they were talking about a scheme for the whole of the staff that was not a special deal for the senior management team or the principal. In many discussions on mergers, people would ask us to fund schemes that were more generous than we actually funded. That was not all that unusual for a college to say that we would like a scheme that goes up to whatever and you would fund it. I would say, no, we are going to only fund up to a one-year payback. That was not unusual and did not set alarm bells ringing on the issues that have led to this section 22. You were under the impression that, if this had went ahead, the severance scheme, which was different from the other colleges of 13 months, then obviously Scottish funding council would pay out £1.36 million, which is standard and you had advised people and the rest of the money would be paid out of the college's budget. Yes, yes. So that was your understanding. You are quite happy. I think that maybe they are happy their own want, but you accepted that. It was allowable within the rules that we would pay a particular amount for a voluntary severance scheme. It was allowable within the rules for a college to pay more than that for the reasons that were in our guidance, if they could make a business case and if their auditors were happy. You are right. I might not have been happy with it, but it was allowable within the rules. If I could just add that we would have been very concerned if there had been more than one voluntary severance scheme for the Lanarkshire merger, we would not have thought that it was appropriate for one group of staff to be treated differently. You are not concerned with the fact that it was within the rules and I know that the rules have been changed now from April. You will get three colleges. Two of those colleges have to set back by the 13 months. One college, whilst some of the staff have paid out X amount, can actually take money from college public funds to pay certain members of that staff. Now you mentioned in your opening remarks that whilst you had considered legal advice to be able to get the money back or whatever it would be, but I do not know what you were told because you did not say that you should not go ahead with legal advice. Are you able to tell the committee what that legal advice was and why you could not pursue the fact that one college was operating in a different manner to pay out staff and severance pays, not for all of their members but for only some, compared to other colleges? Indeed. For the record, the Lanarkshire scheme did operate as one scheme for the vast bulk of staff across the thing. We were concerned about the payments to the principal particularly and we asked for legal advice about whether there was a prospect of being able to recover that money and our advice was that the prospects of recovering that money was extremely remote. That was the basis on which we took a pragmatic decision that put, to be honest, putting more public money into pursuing a legal case that was very unlikely to be successful and was not the best use of public money. I am picking up on Mary Scanlon's question in regard to the fact that papers were not given to board members. Surely, if you were taking legal advice, that would be presented in a case that, as Mary has said and she looked up, the dictionary could constitute fraud. Indeed, our legal advice, based on all those circumstances, was that it was so unlikely to succeed that it was not worth the money pursuing it. Richard Simpson, is that legal advice that we can get access to? Was it from somebody who worked within your organisation in the next level of part? No, it is not. It is from our lawyers. We do not have internal lawyers. They provided specific legal advice at specific times when that had been. At the time that was going on, there it was. That is something that we can discuss further in terms of the reason why the committee can reflect on that legal advice, Richard Simpson. Your letter of 10 October to John Doyle was very clear that the costs over and above the standard scheme would have to be met from the colleges' own reserves. You were saying to the college at that point that what you do is up to you, but you must justify it. That is the guidance. You then moved on to saying more strongly that you required a response to your letter as to what the information that you required was on 11 October. You still did not receive it. You never received that information or this. We have not got papers to indicate that you received that business case at any point. You never did. You wrote on the 16th with some very specific requests for information. In the meantime, Mr Doyle had said that they were taking internal and external advice and that they would provide that to you. Did they ever provide that to you? After the board meeting of the college on the 23rd and after the decision had been taken, we received a minute of the board meeting and a minute of the remuneration committee and a letter from their lawyers explaining their view of the legality of what they had done. I think that is in your pack. We did not receive a written response prior to that. We did meet with Mr Doyle and Mr Gray and their director of finance. As part of that meeting, we specifically just met Mr Gray to discuss the principal's package. Some of the response was verbal, but as you can see from the follow-up letters and the attendance at the board meeting, it did not satisfy us. As a standard practice, you do not receive the minutes of remuneration committees. Is that something that you should be receiving? I understand that, of course, they will have to be approved by the board, but, nevertheless, if they are intending to do something that would contravene your guidance and without justification, which is the situation in January, should you not normally be receiving the committee minutes or draft minutes or minutes that are being sent to boards for approval? We need to draw a strike of balance between us completely managing colleges and us setting rules and monitoring whether those rules are applied to us. We need to look at where that balance sits, but we would be uncomfortable to be in a position where we were looking at every board paper of every college and to second-guessing whether it is right or wrong. The college boards have a role in that, and the prime role in that is for the college board. If too much of their judgment was substituted by that of the funding council, I think that we would be in quite a different place and get people to say— I am not inviting you to take control of all the colleges. What I am saying to you and particularly to Mr Cowell is that, as the accountable officer, if you are not receiving information on a basis, as Mr Kemp has just said, of monitoring, you are not interfering, you are simply monitoring. You are not getting the remuneration committees minutes, then you are not in a position to monitor. Indeed, there is more that we need to do about monitoring the whole operations of colleges potentially. I think that it is something for us to reflect on. In this particular case, particularly given the changes to the colleges since April 2014, we would be in a different situation in that they would have to ask permission before we did those things. It is an important question about how we monitor colleges' whole operations—not just severance, not just remuneration—and part of the system that we have with FSC, with allocated people responsible for as outcome agreement managers for individual colleges, is for them to gather intelligence about what is happening and to identify points of risk. Maybe at those points of risk, we need to look more closely. That is something that we in the SFC are going to be thinking about over the next few months about how we up our game, if you like, in that respect. I mean, I know that you did ask them to formally withdraw the more favourable deal for the six, but you weren't in a position to instruct them to do that. You could only invite them to do that. Is that correct? At the time that's correct. Okay. I think that my last question really is about the discussions that you've had with the officials of the Government. Can you just give us something of a timeline on that? At what point you were having discussions with the Government on the issue of, particularly in relation to severance, with this issue coming up on 10 October, which is when you first learned about it or around that time, what discussions did you have with Government officials between then and the decision finally being made and the payments being made? We, the Government would have found out about this around about the same time as us because they were part of the change team and they were involved in the partnership board meetings and they were aware at the same time as us what was going on and what we were doing about it, though the prime responsibility for action was us. However, the Government did write to Mr Gray backing up what we were saying and asking for assurances that proper processes were being followed. We were in constant contact with the Government over the weeks that this was going on. That was just in the period in October, was it? What about partnership meetings when Coatbridge was coming back in and they expressed the view that you just told us? The Government was involved in that. The on-going support for the merger involved the Government as well, but on the specific issue of severance, they found out the same time as us and were aware of all the actions that we were taking. You said in your earlier evidence that there were discussions when Coatbridge were coming back in that they were looking at a separate severance scheme with a 21-month but at that stage it was either aspiration or intention, according to the corresponders, to reply to all staff, but, nevertheless, it was to be a separate scheme. I am not sure that what they were arguing was a separate scheme for Coatbridge, but what they were arguing was that the Lanarkshire scheme should be no generous in 30 months. By that time, that kind of moved on and probably could not have been un-picked, even had we wanted to and we would not have wanted to. I clarify what was discussed at the meeting on 15 August between Mr Kemp, Mr Mullen and Mr Gray. We met Mr Gray as part of the discussion on how Coatbridge would re-enter the merger. As I mentioned in the letter that we sent some weeks ago on that, one of the key issues was how they would interact with the other colleges, who would be the representative from Coatbridge on the partnership board and how we would manage the re-entry to the merger. It talked about partnership board membership and, as I said in the letter, Mr Gray volunteered that Mr Doyle probably would not be around for very long. Mr Hull's letter on 20 October tells us that he did not think that John Doyle would continue either and would not apply for a job in a new structure. Why was that? I would not like to speculate why Mr Doyle and Mr Gray would have that view. By that time, the principle of the new college, the merging college, had been appointed during the period that Coatbridge was outweath. It would have been tricky had anyone wanted to unpick that issue. There are examples of principles that have gone on to other roles in a merged college, so it was not automatic that Mr Doyle would not have a role in a new college. I cannot speculate on his reasons for that. No, I would not ask you to answer that. As a consequence of that 15 August discussion, it was clear that Mr Doyle was going to go, but Severance was not discussed? No, no. Did you raise what package or anything to do with Severance at that time? No, I have no recollection of discussing that. It was about timing and how the partnership board would operate. In the meeting of the 20th, five days later, what was discussed at that meeting that was different from the meeting on the 15th? That was a follow-on meeting from the meeting with John Doyle, following on from the meeting with John Gray. We covered some of the same issues about how the merger would be picked up from the threads of what had been left some months before. We did talk about the timing of Mr Doyle's exit and he volunteered that his preferred date was 1 November. Some of Mr Doyle was very open in that sense that he was going to go at that time subject, of course, to his own board and all the rest of it. Yes, yes. Again, Severance was never discussed at that time. It would not have been a good idea to raise it, given that we are all in hindsight now, but given now what we know, would it not have been a good idea to consider that? Normally, any discussion on the severance for a principal would not take place between the principal and the funding council. What would normally happen, as did happen in this case, was that the chair would perhaps phone our chief executive and ask what the guidance was and would be given the guidance, as was the case in January. So, as far as I was aware, that is what has happened. I am just suggesting that on 15 August, the meeting that you and Mr Mullen had with Mr Gray, the chair of the college, when a discussion took place on the fact that Mr Doyle was going to go, that would have been a good opportunity to restate the fact that you had issued guidance on the severance, and therefore they might be keen to follow that. Had I been aware of the discussion of the Renumeration Committee in January, I would have certainly taken that occasion to raise it, but we were not. As far as we were concerned, the guidance had been issued and we had no indication that it had not been accepted. For the record, I assume that neither Mr Gray nor Mr Doyle raised with you any discussions or they gave you no indication of what had been already considered in the Renumeration Committee back in January of that year. No, no, no. Okay, thank you. Can I just clarify Mr Mullen's position? Mr Howells, earlier on, you said in evidence to the convener that Scottish Government officials were kept involved all the way through this process. What is Mr Mullen in the context of this? He is a member of the Scottish Government Change Team. Does that mean that he is a civil servant or what is he? I need to ask them exactly his status. My understanding was that he was an advisor contracted as an advisor. An advisor? That is my understanding. Was he the only advisor, stroke civil servant that was involved in these crucial meetings? I think so in these meetings, in these specific meetings. Mr Mullen was the Government person who would attend the Merger Partnership Board, so he was perhaps most directly involved, but there was also frequent contact with other civil servants about the progress of the matter. Did you be able to give the committee, I do not expect, of course today a timeline, as other colleagues have been asking, on what those frequent communications, and you can clarify what those were, were with the rest of the Government during this process, and at the most point, what was discussed. Just to be clear, you mean about the merger process throughout that? No, I mean, well, yes, but I would also like, obviously, to clarify as to whether there was any discussion about severance and at any time whether that was raised by the Government. You mentioned that the Government officials had raised that issue and written a letter in October in response to Richard Simpson's earlier question, but was it again raised at any earlier stage? Okay, we'll do a timeline on that. The other one I wanted to just clarify was the email that Thomas Keenan wrote sent to you, Mr Kemple, on 25 October, I presume you've had these papers and know them intimately, and in that long email he says, and I quote, I'm also aware that a further meeting had taken place in Edinburgh to discuss the departure of the chief executive principle in light of recent events. It would have been more beneficial for him to have gone immediately. Could you shed any light on your understanding of what that meant? That's obviously, as I repeat, an email of the 23rd of October, so the time when all this was absolutely erupting. I take that to be a reference to the meeting, either of the meetings with either Mr Gray or Mr Doyle, at which discussion was heard about the correct timing for Mr Doyle's departure, so I take it to be a reference to that. There were no other minister meetings that they don't appear in your timeline that the funding council provided to the committee or in any other evidence that we've yet had, no other meetings that took place subsequent to that 20th August meeting right through to October in the following two months, in other words. So my point is that once you knew the principle was going to go, it was two months expired before we had this, if I may say so, major row on the 23rd of October. There would have been fairly frequent meetings about the progress of the merger, but we weren't aware that there was any issue about the severance until early October. Thank you. Mr Howells, at 9.34 this morning you commented that your expectation was that the college board would operate within the rules. Obviously, the merger process is something across the country, it's not just to this particular area. Are you satisfied that all the merger processes that have actually happened have been operated within the rules? This one is a rogue experience. The fact that the Auditor General has identified two section 22 reports in relation to the issues one here and one at North Glasgow suggests that those are two outliers from the process as a whole. It's due to say that every single merger has its own unique characteristics, but I would take the Auditor General's view as a benchmark that we should do on to that. I would say that that was this one and North Glasgow are two rather distinct ones out of that. In terms of this one, earlier on in the comments and it's also been documented in your evidence, from January to October, the fact that the SFC didn't see the minutes from the meeting and you weren't aware of their composition until late in the process, and the questions from Richard Simpson earlier clearly were indicated. We wouldn't want the SFC to run all the colleges and the like, but certainly after a couple of months and with no response from Covbridge College in terms of the minutes, we would not then have been a better course of action for the SFC to actually be in contact with them at an earlier process, at an earlier stage, to obtain copies of the minutes from that particular meeting in January. We would not normally expect to see minutes of a remuneration committee, but on the timeline— Sorry, I can enter just one second, but I generally accept that point, because I wouldn't want the SFC to run all the colleges, because I don't think that would be beneficial for all concerned, but at the same time, because a merger process was being discussed, then would it not have been that the right course of action for the SFC to actually go back at an earlier stage? It's important to remember that, for a large chunk of that time, there wasn't a merger process involving Covbridge and that the discussion that led to Mark Bathill sending the guidance took place at the end of January, when Covbridge were considering entering the merger. They were in the merger for a few weeks in early February, and they then left the merger again. The discussions that we had with Covbridge over the period from February through to July-August were less about the details of the merger and what would happen with voluntary severance and so on, and were more about discussing whether they wanted to come back in. For most of that period, there was no merger process involving Covbridge, because they left it in February. But at the same time, except that point, because there was that air of uncertainty in terms of what their course of direction was going to be, would it not have been beneficial for the SFC to pay a bit more attention or closer attention to going on at Covbridge College, to allow yourselves to have a better understanding of what was going on on the ground? We were paying quite a lot of attention to Covbridge, but on the issue of the merger and not this, with hindsight, had we known? I'm not sure that anyone in the college saw that minute until later on in the year. Had we seen that minute say the week after, we would have been very concerned, because it clearly states that the funding council supported a line of action to which we didn't, and was clearly contrary to the guidance that we'd given just before that minute. Had we been aware of that, we would have been very concerned. The issue is, should we have tried to find out what had happened at that remuneration committee, I'm not sure that we knew that there was a remuneration committee, all we knew was that the chair had inquired of our chief executive, our then chief executive what the guidance was, what that guidance had been given, and then they were no longer part of the merger. To our mind, not knowing what had been discussed at that remuneration committee, there was no issue, but with hindsight, we would have done things differently. Why would the SFC not be a aware of the existence of our remuneration committee in our college? We weren't aware that that particular meeting had taken place. We would have expected a college to have an remuneration committee, but we weren't waiting for the—sometimes you will hear that something is going to be discussed at a particular meeting and you'll want to hear the outcome. In this case, I don't think that we were, and it came as a surprise later that that discussion had taken place. If I may emphasise a point that John Jones made, our focus during most of that period was how do we get a good merger for Lanarkshire and how do we get a coverage college back involved in that, and that was the focus of our attention. That was the most material issue going on at the time. In your comments earlier, Mr Howells, in your opening statement, you indicated that, from April 2014, the new powers have been introduced and they greatly reduced the risk of similar events happening again, and I'm quoting you from what you said this morning. How confident are you that this type of situation can never happen again? I guess that you can never say never, can you? While you have independently run colleges, however, the rules now say that a college needs to seek prior approval from SFC for any new severance scheme and changes to a scheme and this kind of situation. I guess that with those powers, had I had those powers at the time, in October I would have acted differently and I would have explicitly vetoed a scheme of this thought. I wouldn't have been offering advice and guidance and seeking all the process that we had. I would have simply been saying, you've sent me a business case, I don't accept it, I'm not agreeing to it. I think that makes a significant difference. I think also that some of the attention that's now been given to the issue as a result of the Auditor General's report and the things that we'll be doing afterwards will make a difference. As I said earlier, within SFC we're thinking again about how do we use a risk-based approach to try and focus on the danger points, how we up our game to identify those and how we act to avoid those kinds of things in the future. I'll take you back to your comments once again of 9.34 this morning when you said that the expectation was that the College Board would operate within the rules. With the new rules in place from April 2014 and with your comments from earlier on this morning, what actions could you actually take going forward if you were to find that some individuals or a board weren't operating within the rules at some point further down the line? I mean, I guess it's if we find out ahead of the event, as we did in this case, then I can veto action taken by that. Of course it's always possible for people to write checks or out with the rules and we find out afterwards in which case we have to respond in that way. Again, the rules are very much clearer. If somebody did step out of line and we found out afterwards, then we would have a stronger power to act with those individuals. The likelihood is much less because everybody is now very aware in colleges of a whole set of new processes about how money flows from us and how the Scottish Public Finance manual applies to them. I think there's also more work to be done in terms of training and development for board members so that they play their role properly and they apply the appropriate challenge function there. I think the new environment with a larger, stronger colleges, with stronger finance teams and with strong networks of people helps us to raise standards. Thank you very much, convener, and good morning, gentlemen. I understand that you are telling me that decisions on remuneration are made by boards and it is their responsibility. Equally, it follows that it is their discretion. You had a standard scheme. I am wondering if you could give me some appropriate or some criteria which you think might be appropriate, though it is their judgment, that would justify going beyond the scheme that you had regarded as standard? I will bring John in here. For me, you can imagine situations where, for the benefit of allowing a new college to emerge or whatever, there is a need to incentivise people to move on. You can imagine that, with some small margin of flexibility and a different scheme to reflect different circumstances, we never know exactly what we are going to hit when we are trying to make those sorts of changes. However, I would regard that as being—a good practice would be that it is quite narrow that that bound of change there. I think that there is a matter of reflecting on individual circumstances. Had I seen a business case presented, I would have found it very difficult to agree that amount. John, do you have any? Our guidance is fairly clear on what should not be included in the business case about rewarding poor behaviour and rewarding past success and so on, because the assumption is that the person has already been paid for that. However, because we are talking about voluntary schemes here, you need to balance how you get the outcome that you want within a voluntary scheme, so how much you need to offer to make it work. That is the business case that you would normally expect to see. I stress that we do not see those business cases to satisfy the auditors that you would normally make those. We pick it up through the accounts that the auditors were happy or not happy with the business case. Our guidance is stronger on what it should not include than what it should in that business case. However, some of the things that we have heard discussing in the past about your so-and-so has done an excellent job and ought to be rewarded. That is not allowable within our guidance. Forgive me, but I am sitting here representing the normal folk of Scotland. I am not understanding why paying somebody more to leave when they paid a lot of money in the first place, when they can see it coming and when they are plainly not a role for them, and when they have skills that must be transferable. I am struggling, as I think most people are, to understand how there is a business case for giving them more to give away. What can be the justification? I think that the reason we were so concerned in this case was that we would struggle to see what that business case was as well. Right, but can I come back to the original question then? What might make that business case? I am sure that later this morning we are going to hear that it was justified. I would like to know what the criteria might be that, in your view, might justify that. The criteria would be about the effective operation of the college, but that said, our guidance explicitly rules out some other aspects that might be related to that. Let us be clear that the reason why we were so concerned about that is that we could not see what business case could be made. Has Mr Hales anything to add to that? If you guys cannot see why there should be a business case, I am sitting here thinking that there cannot be a business case. Two things. The new controls that we have means that we have to approve new schemes. At that point, you are talking about what is the business case for that whole scheme rather than individuals. Therefore, we want to see the evidence for that. What we would look at in that case is how does it fit with public sector norms, the practice at the moment, is it affordable, does it look like it is going to be fair, is it not excessive and all those sorts of things. That would enable me to agree a scheme. If a college came to me with an exceptional payment for one individual or some group of individuals within the scheme, I would have to be convinced that there was some exceptional reason for it. My normal default assumption would be that there should be one scheme that applies to everybody. Indeed, that did happen in some of the mergers. I think that I am back to the point that John made. Is there a case for some exceptional treatment to enable a college to get from A to B to make the journey to a new merger? Again, the situation that we are in at this moment, I could not see that such a justification could have been made. I am with you that it will be hard for people to justify having special treatment for individuals, because it will be hard to see why that would be justified. A few of the brief supplementaries are from Colin Beattie and then forward by Tavish Scott. I must say that, listening to what is being said, the reform of our college sector came none too soon. I just want to touch on something that Tavish Scott was looking at. The SFC's submission refers to a meeting on 20 August 2013 between John Doyle, John Kemp and Roger Mullin, as indeed does the acting principal submission. It is noted that the subject of the meeting was discussion with the principal and leaving his post early. However, Mr Mullin seems to be contradicting that and stating that that is not so. Since Mr Kemp was at that meeting, can he clarify that? The account of the meeting that is in our submission was informed by my recollection of the meeting and my notes of the meeting. Mr Mullin's response says that there is no time was there any question of us forcing any redundancy or resignation on the principal. There was a discussion of the timing of when he would leave because he volunteered that his aspiration was that it would be the beginning of November. There was a discussion on the timing of the exit of the principal and that was based on an earlier discussion, which I had been present at with John Gray. I understand that there was earlier discussions before that involving others about the time of the principal's departure. The key point that Mr Mullin is making was that there was no question of us forcing redundancy on him. There was a discussion on timing on something that had already been broached by others. I wonder why Mr Mullin's submission states that the acting principal's comments are without foundation. There was no question of us dealing with it in the way that it is suggested in the acting principal's submission. It was purely exploratory talks with the principal in terms of an early departure? It was beyond exploratory talks because we had heard prior to that meeting from the chair that he did not intend to stay. It was about the timing. There were substantive talks at that time. Was that about remuneration at that point? No. It was just about the principal of him leaving. How would we manage the merger over that period and whether the timing of him leaving helped or didn't? Thank you. Two brief questions. The first is, was the Scottish funding council under constant pressure from Scottish Government officials to drive forward the merger process, not just in Lanarkshire but across the country? Was that literally a week-by-week assessment of how you're getting on, a month-by-month assessment? It used the word pressure, which implied sort of a pushing. The process was being monitored closely. We were continually discussing it. It was a key aspect of Government policy and one that we were charged with pushing through. We discussed the process across the whole country on a regular basis. Indeed, there were points where we were meeting weekly. I don't know if it was true at that moment. Through the course of that summer 2013, the whole merger process, which was quite extended. That's fine. The second question was, on the legal advice you mentioned earlier on, I think if I caught your evidence correctly, you said that the legal advice or the judgment on the legal advice was that recovering moneys would be all but impossible and the more money would be spent recovering. Did the legal advice actually cover stopping the money in the first place? Of course, that had happened already. It was about recovery of the payment in excess of what we would have funded from the board members. Can I just clarify when you got that legal advice? Sorry to be panicked by this. When did you precisely get that legal advice? Can you recall it? 18 December 2013. I understand from the guidance that the colleges do not have the power to make payment for hurt or distress due to severance and no gratuity for service beyond a small token can be made. Did you have it make any comment on the fact that not only were these extra payments being made, but that many of the staff members were given pay increases during the course of the process, which were then consolidated into the severance payments? The severance payments were not only extra but were augmented on even the standard process of which you were approved by significant sometimes pay increases, 10 per cent in one case and 19 per cent in another case. We were not aware of those pay increases until the auditor's report, so that was not part of the discussion. We were aware of the proposal for the senior management team, and we were aware of the principal. However, those pay rises took place out with our site and were picked up by the auditors later. So the 1.3 million that you paid over on an invoice that was submitted to you in the new year sometime, which was based presumably on the standard severance payments, on those augmented, you did not think to ask were those the terms on which that was occurring? What was not visible to us at that time, and we were not aware until the auditor's report, was that some of the staff had under these significant pay rises. However, if you look at the boards reports on the remuneration report on the audit, you can see that there were step-ups of a number of these staffs stepped up the bracket of payment. It may have only been a thousand, because it is sometimes from 6070 to 7080, but one at least went from 6070 to 90+. There was a big increase for one member of staff. We were aware of the acting arrangements in the college, not of the precise financial arrangements, but there were some of the things that were picked up in the auditor's report. We were not aware of that because they were members of the senior management. However, you did not think that with all that was going on and the clear concerns that you were expressing about the whole process, you did not think to actually say, look, I want details of these payments. I want details of the pay of the staff, and I want them for last year and this year and any additional payments that were made. You did not think to inquire about any of that, or at that point ask for the remuneration committee's minutes, which would have shown those increases and the consolidation? We had the remuneration committee minutes for January and for October. The issue that is picked up in the auditor's report is that some of those other payments were not properly done anyway, so we could not have picked up that through remuneration committee minutes. With hindsight, looking backwards, you can see that there were changes to the salary levels that we should have perhaps been aware of, but it was not our practice to ask when somebody submitted a claim for VS what variation had there been in that person's salary over the last year. With hindsight, in this case, perhaps we should have, but as Mr Howells has said, in most cases, ecologies are bind by the rules. There has been this case in North Glasgow that has been picked up as section 22 issues, but, by and large, colleges have been bind by the rules. You also said in your earlier evidence that it would be entirely appropriate if, as part of the process of the merger, staff had to take on additional responsibilities that they should get additional pay. Are you confident that no other college consolidated those temporary payments into the remuneration severance packages? If you are not, you might want to think about having another look at it. It has not been picked up by the auditor general, but it is something that we need to think about. Mary Scanlon? On opting in again of Coatbridge College to the merger, was that a decision of the full board? Do you have the minutes? Did the full board, including the chair, make the decision to opt in, opt out and opt in again? I think that that is probably a question that is best asked for the next witness. I would have sought giving you in charge of the mergers that you might have known. I was certainly aware that there were divisions within the Coatbridge board about whether they should be in or out of the merger. I was at the meeting of the merger partnership board where they left, and that decision was taken not by the entire board but by the people from Coatbridge board who were at the merger. Were there divisions between the chair and the principal? Not that, I am aware of. Given that you were in charge of the mergers whole process and Mr Hyls, you are the accountable officer, there was obviously some pressure for you to make the mergers of our colleges a success. You said in response to, I think that it was Nigel Dawn, incentivising people to move on. Given that you were in charge of this merger process, given that you wanted it to be a success, given that there was a bit of local difficulty in Larrickshire, and given that the principal has been seen as an impediment to the merger process, did you perhaps turn your blind eye to some of the goings on at Coatbridge, because it seems from where I am sitting that they just run circles around your guidance, your efforts to contact them, your advice, the withheld information? So, you asked, did I turn a blind eye to this? Yes. No, I didn't. As you can see how active we were and what we put on the road. It didn't make any difference, though. That's why I was certainly not turning a blind eye to this. Did you incentivise, was the excessive payments to Mr Doyle, for example, forget the rest of the team, were they part of an incentivisation for him to move on? No. To clear the way for the merger process? Well, absolutely not, and we opposed, as you can see, we tried to prevent those things happening. Was he an impediment to the merger process? I think that, as we said earlier, he and his chair had come to the conclusion that he needed to move on at that point. So, your focus was on the merger process? Yes. There was an agreement that he had to move on in order for that to be a success, and he walked away with significant amounts of public money in order to do so. We would have expected him to have, as you say, walked away, but with a fair amount, properly determined to repose. He was getting in the way of your main goal, which was to make this merger process a success. But not at the expense. Our goal, we were never deviating from, we want this goal but at, we want good value for money in getting the goal of an effective college. So, Tavish Scott's question about him being asked to move on, surely that was all part of the merger process? He was not asked to move on by the SFC or by the Government. He was a judgment reached within Coatbridge. Yes, relationships between Coatbridge, in particular the chair and principal and the other partners in the merger were very poor, and that may have contributed to that decision, but that was a decision taken by Coatbridge. Is that why 33 staff from Coatbridge did not play any part in the new merged colleges? In most of the mergers, in all of the mergers, there are people left in voluntary severance. There are many people who were employed at Coatbridge who are now working at New Colours Lanarkshire. Can I just take back to the question that we have raised, Mr Kempe, in connection with the deal for the management team? You said that you were made aware of that, apart from the issue about the holiday enhancements, but you were satisfied with that arrangement for the management team. Well, let's be clear about which arrangements we were made aware of. When we were made aware of the potential for the management team to receive 21 months, when the rest of the staff were potentially receiving the 13 months as part of that, we were very unhappy about that. We were both annoyed about the content of that deal, a proposed deal, and we were annoyed that this had apparently happened without any discussion. We were very unhappy with that, and that was the content of it. What I was aware of was that, after Mr Doyle's departure, there was some reshuffling within the senior team, and I was aware that there were some payments in that. I don't think that we were aware of the detail, but we were happy that they were there. That is the management team then. What happened to the rest of the team? There were other people in the building as well. I'm sure that there would be the cleaning staff, the catering staff. They would have seen redundancies take place. What kind of enhancements were carried out of their arrangements? Were you not interested in that? Were there no consequences of just the management team that you were concerned about? I think that the issues that I was referring to that I was made aware of, albeit not in detail, were that they did not intend to replace John Doyle with an external person, and therefore they were reshuffling the team that they had. That would not have applied to the teaching staff or whatever, and that their jobs were not changing. However, our concern was that fairness— I know that they said that some of the teaching staff would be under pressure as a result of both the mergers process, and we are aware of that and the evidence that we have received. The fact of redundancies would have taken place within the teaching staff. They were under pressure—the teaching staff, the catering staff and all the other people in the college. What did you say in response to the management team when they said, well, you know what? We need to reshuffle here and we are looking for some extra payment for that. What did you say to them then? You said that you were happy with that. No, no. The extra payments were not our responsibility. The chair following Mr Gray's departure made us aware that he was doing that, but that was in the context of the principal had gone and they were reshuffling. Our concern was for the whole staff that there was a fair voluntary severance. I will bring you back to the whole staff. What I am asking you about is the management team. You have been made aware of the fact that the management team have had to reshuffle, and yes, they have additional responsibilities. What you said is, yes, I am happy with that. That is something that we would accept, but what about the other staff who would be similarly under the same kind of pressures? There will be other staff in the building who are under pressure as a result of this process, and we know that from the evidence that we received. What did you say in response to that? Would you have said in response to that? We do not manage the college. What we were concerned was that in the voluntary severance scheme, which would affect all of the staff that it was a fair one and applied equally to all staff and there was not a separate way of dealing with the senior management team. What I was saying that I was aware of was that there was some reshuffling of the senior management team and that involved some changed payments. I was not aware at that stage that that would flow through into voluntary severance. Just two final questions in connection with the proposal. In terms of the arrangements that Mr Doyle reached with his board, are you aware of any other colleges that have reached similar agreements, maybe 24 months or above the 13th month? I mean, would there be a number of them that have reached those kind of arrangements? Throughout this whole process, there have been different schemes in different parts of the country. Let's talk about months, so Mr Howells. Let's talk about 20 months. Has anyone else received? Could Mr Doyle give us evidence and he's coming to the evidence shortly? Could he say to us, well, tell you what, I know of other principles that we've received similar deals. Will he say that? Yes, indeed, I'm sure he will. There are other people who have achieved other deals, but nobody has achieved them through the kind of process that we've seen. We will not forget about the process. Let's say that the principle of this is that someone can receive a 24-month deal. Have others received similar deals, but they've been able to tick all the boxes and go through the auditing process and say, yeah, here's the box ticked here, here's one here. Is it the case that Mr Doyle is just not getting all the boxes ticked? Others have. We've already discussed North Glasgow College, so let's discuss the others. Others have had those deals, but they would have been part of a uniform deal across the college, at that individual college, and it would have been done through a proper process, and it would not have been funded by us. Just clarify for the record, I think, that this is an important point. The response from the Scottish Fund councillors, we're appalled at this deal that Mr Doyle reached. Is it you're appalled about the process that he followed, or you're appalled about the sums of money that he's received? Let's clarify that for the record, please. I'm appalled at the process that's been followed and the poor governance that's been demonstrated. So you're not concerned about the sums? I do not think that those sums could be justified in this case. But sorry, I'm not asking you about in this case. In this case, someone has been awarded 24 months, so let's clarify for the record. Can you confirm the sum of money for me, please? It was 30 months by the time. That today, there's six months paid to your notice. So can you confirm that no other principal, apart from what we've already discussed in the last college, but not all the other measures that take place, have any other principal received anywhere near that kind of deal? There have been deals of 20, 21 months and similar things. Why did you not say that you're appalled about those deals then? And there are other deals in other parts, in other parts of the public sector of that. I'm not asking you about the public sector, though, with respect. I'm asking you specifically about the sector that you're responsible for. I take it that you're not responsible for any other organisation, so let's clarify. You're accountable officer for the Scottish Funding Council and the question that I'm asking you is, can you provide to us details of other principals who may have received something similar to what Mr Dawg is going to present to us today? The details of other principals will be available in the accounts of the colleges involved. The process was that the college took a decision on those things and they had to satisfy their auditors. In the two cases in North Glasgow and Colt Bridge, the auditor has been picked up and there have been section 22 reports. In the other cases, I'm leaving aside the ones that were referred to in the auditor general's report on colleges. Mr Ken, don't talk this out. We are asking specific questions here. I'm asking you, can you provide us with details of other principals who may have received something similar to Mr Dawg? We guess that Mr Dawg will come before this committee and advises that other people received something similar to me, but I've only wanted what they got. We can compile the information from college audit reports, which are available in the accounts. I clarify for the record that we can expect to receive other arrangements of reach that may be months that you have to advise in terms of how many months it was in terms of anusality, but it would be very helpful for the committee to receive that information. We can do that. The business cases that justified those increases, please, because those were presumably submitted to you and approved by you. No, they would be submitted to their boards and have to satisfy their auditors. They would not be submitted to us. You and monitoring would be aware of the business cases, because you said that you couldn't see any terms for justifying those increases in earlier evidence. Have you not looked at those other cases? No, the process would be monitored through their annual accounts, but not by you. In terms of a final question, someone's publicity that you have read has been that Mr Doyle has felled his own nest. Those are the allegations that have been made, and those are the comments that have been made in the media. Do you agree with those comments that have been made? My view is that the governance— No, I'm asking you if you agree with that statement. Yes or no, it's whatever it is, but I'm not asking you to qualify. I'm just asking, do you agree with the statements that have been made? There have been a number of press reports that have said that Mr Doyle has felled his own nest. We have to take evidence on that, and I'm only asking you if you agree with it. Yes or no? My concern is with the actions of the board who made that decision, because they are ultimately the ones who made that decision. You are not able to answer that question. I think that we have made clear that the correspondence follow-up will require this. I thank both of you for evidence this morning. I can remove the committee into a brief five-minute interval. I would like to welcome our second panel of witnesses in connection with the AGS report on Coatbridge College. First, I welcome John Doyle, the former principal of Coatbridge College, and John Gray, the former chair of Coatbridge College. I don't think that I have to go over what I said at the earlier part of the agenda on agenda item number two. We were referred to correspondence that we received and the way in which we would approach the committee proceeding, so I know that you were part of the audience that listened to the earlier session. I understand that both Mr John Doyle and Mr Gray would like to make separate statements, so I will start with Mr Doyle first, please. First of all, thank you very much for the opportunity to come along and speak freely today. For almost 40 years, I have been in public service, and up until the publication and statements made by the Auditor General, I have had an unblemished career and reputation. For nine years, I had the honour of being the principal and chief exec of Coatbridge College, a position and achievements that I was very proud of, particularly in working with and leading such a professional and highly-motored team of managers, lecturers and support staff. I take great exception to the conclusions that were reached and the vexatious statements made by the Auditor General about myself, John Gray and the senior team. They are, as I hope, you will, through this process and the evidence that you have been given already and maybe not received, will know that they are totally unfounded. I hope by now that you will also know that the severance package that was offered was based on a federation action plan, a scheme plan for all staff in all four Lanarkshire colleges, and that was the intention of my board for it to be available to all staff in the event of colleges merging. Given the real conflict of interest, I very much wish you to be aware of exactly how I and the clerk to the board completely discharged our respective duties at the point where the funding council and the Scottish Government expressed their concern, read the existence of two VS schemes. This was achieved by the engagement of Biggart and Bailey. However, I would respectfully ask why no one has mentioned the role of Biggart and Bailey in this matter. I am at complete loss as to why this committee was not given all the available evidence, in particular the minutes of the Renumeration Committee and board meetings. They were readily available to all to see. I would also ask someone to clarify exactly what the auditor general meant by I acted out with my authority. I would have thought, given the damning statements that she has made about me, that she could have at least been specific. I would not have raised that, but given the correspondence from the funding council and the statements by Lawn Tiles and John Kemp, I would wish the opportunity to clarify exactly why I felt it necessary to leave early. Finally, the evidence that I can give can only be up to the point of the 31st of October. Good morning, ladies and gentlemen. You will not be surprised to hear that I totally reject the auditor general's conclusions, and I have very good grounds for doing so. I have two points that I would like to make—the first one. I am surprised that the auditor general was able to draw such emphatic and terse conclusions without at least the courtesy of discussing the situation with the two people being criticised, John Doyle and myself. As you can see from my career details, which I believe have been circulated to you all, I have operated through my working life at a high level of corporate governance, not something that I have ever taken lightly. The board structure in further education was one that I was unhappy with from day 1. As a result, I invited the management team, along with staff and student representatives, to attend board meetings. That was an open and inclusive process, which ensured good communications at all times and meant that nothing was being fixed behind closed doors. When the auditor general made her report to this committee, it should have been set very firmly in the context of the Lanarkshire College's mergers process. At the start of the process, there was no nice clear set of rules. The situation was allowed to evolve and would react to changes and changes being made and incorporated from time to time throughout the whole process. The timeline illustrates this clearly. Cutting to the chase, I would like to go straight to the minutes of the board and remuneration committee meetings on 23 October 2013, happened to be the day before I had submitted offers. To the subsequent correspondence from my successor to Lawrence Howells, those documents show quite clearly that all concerned were fully informed of the situation and which together correctly stated the final position. The question that I have to ask here is, were those documents seen by the auditor and the contents reported to the auditor general, if they were, then I find it very hard to understand why we are all sitting here today. Thank you very much. Okay, so can I just open up questions firstly to you, Mr Doyle? Can you confirm that during your, so you spent nine years at the college's chief executive in principles, I did. You can confirm what your annual salary was during that period? It varied, obviously, but... At the end of the period? I think it was about £116,000. It was £116,000 during that period. During that period you had been responsible for redundancy payments or redundancy servants arrangements for a number of staff that worked for you, is that correct? Over the period of nine years some staff did leave with... Volunteer service agreement. But we've never had a voluntary service agreement within the college up until 2012. Okay, but were you involved in the voluntary service agreements for the staff who were ultimately, I think, is it 13-in staff that were made redundant during that period? No, I was not involved in any of that. So you weren't involved in any of it at all? Nope. Why was that? I wasn't there. During the period of the severance and the run-up to that? No, I wasn't there. I left on 31 October. Yeah, but I'm talking about the period prior to that. So you weren't involved in any redundancy payments during that and the run-up to any period? So during your nine years you weren't responsible for redundancy payments or voluntary service agreements? There was a very occasion when someone would leave with a scheme, but no, not in the context you're talking about with regards to merger. Okay, so would you have expected anyone you were responsible for during that period to expect to enjoy the benefits of 30-month payment being made available to them plus a pension agreement? I think we would want to break that down exactly what was offered and what was contracted. I was leaving on a scheme that was based on the Lanarkshire Federation scheme for all four colleges. So what does the Lanarkshire Federation scheme say? Well the Lanarkshire Federation scheme... Do you have a copy of that document that you can provide to us? No, but I'm sure that the funding council at every meeting is MacTavish who chaired as regional chair all the chairs and principles of the colleges. So it's well recorded and the Scottish Government adviser Roger Mullen was at all of those meetings. If I may, if it helps, and I think it does put it in context, in November 2012, and I'll be as quick as I can, in November 2012 South Lanarkshire College, one of the four colleges in Lanarkshire, presented a VS scheme for potential adoption by all four colleges in the Federation. It was loosely based on what was called the Edinburgh model, which we're all aware of and move on. That was then put in the action plan for Lanarkshire and it's a matter of public record, the plans are there. As I said earlier, my college didn't have a VS scheme and we, the board then adopted that, the intent to adopt that. So can I take you back though? So you enjoyed the benefits of that scheme eventually, so that's eventually the scheme that you benefited from, is that correct? Not necessarily attached to that, but you did benefit from 30 months paid, didn't you? That's a matter of record, yes. Yes, that's a matter of record. Did anybody else in the college benefit from 30 months paid? No. So why did you think as a personal leader in this organisation that it was acceptable for you to receive 30 months paid and nobody else did that? You're the leader of that organisation, you're the leader. Should you not have set an example and said, this is what everybody else is getting, so I'm going to ensure that by leading a good example, which I am there to do, that's what I've been paid for, £116,000 per annum, I'm going to lead by example here. Why not do that? At the time, several weeks before I was due to leave, there was a change in scheme. In September, and I was leaving at the end of October, and I can't remember when, about the middle of September, new college Lanarkshire published a new scheme, not the one that was originally planned, all the way from January to September. I found out from the EIS and Unicent trade unions who told me about it, which was then subsequently confirmed by the board reps, Tom Keenan and Cal McCarthy. Up until that point, several weeks before I was due to go, I was under the impression, as was everyone else, that the unions included that if there was a scheme in animals leaving under BS, it would be under that. That, to be fair, doesn't answer the question. It's a similar question to Mr Gray. You're the principal. Everybody else has been offered it. Regardless of the timing, whatever agreement it is, whatever agreement you want to call it, surely as a leader of that organisation, surely as you, as the chair of the organisation, Mr Gray, should have said, I'll tell you what, if people are going out of that dough, then they're all going out of the same package. I'm not making any preferential treatment for anybody. Is that not what you should have said, Mr Gray? Why did you give preferential treatment to Mr Doyle? The scheme that Mr Doyle is talking about was discussed by the board and the board decided on the process. I did not make the decision. The board made the decision. The remuneration committee, you mean? The remuneration committee and to the board. And did you agree with the decision? Yes, I think that. So you're leading the organisation, you're the chair, so you obviously led it, didn't you? You said, yeah, that's a good idea. Let's pay the principle more than everybody else. Well, I think that if you look at the commercial world, which is the world that I used to work in, this is public money, Mr Gray. Well, I can argue the toss on that as well. As you've heard, the public money was limited to, by the funding council, to what was paid to everybody else. The balance of funds had to be found by the college, which we did, and we did it on an annual basis. We had a commercial operation that raised funds to support the college, funds that were not provided by the funding council or this government. Yeah, respect the fact that you were advised by the funding council not to provide this. Sorry? So you were advised by the funding council. Did you receive that email from Mr Kemp? I can't remember all of the details to be perfectly frank. Well, surely you can. It's three or four years ago. Yeah, well, it's not three or four years ago, actually. We're talking about 2013. Mr Kemp, you have 24th October. There was a board meeting that took place which you presided over as a chair. That's right. That meeting was made explicitly clear to you that you should get the agreement of the auditors before signing anything off and you should provide a copy of that agreement too. The funding council crashed you. Did you get the agreement of the auditors both internal and external? External. That was my last day at the college. I'm just asking. No, I didn't. I personally did not, but my successor did follow it up. So this deal was agreed, Mr Doyle, without the agreement of either the internal or external auditors. Is that correct? If I can explain exactly what the situation was, in around 10 October, as we've heard, we received a communication from the Scottish Government which was followed up, as we've heard, by the Scottish funding council. The clerks of the board night, given the concern about the two VES schemes, contacted the chair and put a suggestion to him which he readily accepted in that we would bring in, bigger than barely, our legal team to act as an independent audit. Let's forget about the legal teams. Well, it's very important, sir, in the context. No, no, I'll come back to the legal team. I'll ask you about legal or somebody else I'll ask you about. But let's talk about the auditors. It's very clear in the guidance which was issued in 2000. We're going back some years now and in 2000 it's explicitly clear that you should seek the approval of either the external or internal auditors before entering into these agreements. So can you tell me? Did you do that? Yes or no? Well, it's not a simple yes and no. I, given the conflict of interest— Oh, sorry, conflict, yeah, okay. Given the conflict of interest, clearly the conflict of interest I was in, I then suggested with the clerks of the board that the chair bring in an independent team to look at the whole process to ensure that we had continued transparency and openness. And what's very important is that in doing so, I had extinguished my duties and responsibilities as the person, as the principal, by ensuring somebody was there completely independent who would advise the remuneration community and the board. That was bigger, Bailey. And the partner was Paul Brown. So Paul Brown would have sought, or you're aware of this, Mr Gray, the T-seek approval from either the internal or external auditors where they are aware of the deal that's been reached. So can we find that out? I think you can. You're aware of that, Mr Gray. I mean, surely, I mean, you still had to ensure that regardless of it, I know there's issues concerning your own deal. Well, real issues, as you stated. Yes, which I think is respected, I think that's respected, but there were other elements of what was been proposed that I'm sure that you would have been involved in. Are you weren't involved in any of it? No, I was not involved in any remuneration committee meetings. I didn't contribute to any remuneration committee meetings. As soon as we were aware that there was a concern over two VS schemes, we brought in Bigarton Bailey to advise the board on all aspects. Now that included all guidance, all support, all documentation, in order that the board of management, the remuneration committee of the board of management, were in a solid footing of knowledge and information in which to make a decision. They then met again, having had all that information, and may I say that Bigarton Bailey provided all the clerk to the board duties to that, to ensure transparency and to ensure that what is being alleged wouldn't happen. I'm acting up to the point where we've engaged Bigarton Bailey as the principal and chief exec, making sure that I've done everything possible to ensure that everything is done correctly and transparently. At that point, if I had done any more, I would have been accused quite rightly of the meeting. I'll just ask one final question before we're going to call on Beatty. Will you ever ask by anybody in the funding council to leave? Did anybody ever say to you, tell me what your time's up, we'll see if we can get you a package, let's see what we can do here. We'll look to enhance your package, we'll give you the Edinburgh agreement. Did anybody ever say that to you? No one ever said that to me in the funding council, but there is a story to tell with regards to me leaving him. We'll tell the story now then. Why don't we hear the story then? All right. Who did say it? What actually happened was if we go back to Mrs Livingston's allegation with Mr Mullen, which I'm sure somebody is going to ask me, so we may as well talk about it now. Mr Mullen, Mr McTavish, came to the college in July and met with John Gray and myself. Mr McTavish is the regional chair, was the regional leader at that point. Just to clarify something. No, that's fine. She, along with Roger Mullen, were facilitating the merger. They came to the college and they presented the terms and conditions of merger. Within those was a statement that I couldn't apply for the post of principal and that the principal would be Martin McGuire. I then met with all staff, as I did every year in the principal's address, and told them in August that although I sadly couldn't be with them after merger, I would be with them until 31 March, working with them to ensure that the cohort students that were existing got the best experience and, very importantly, that I would be with them to support them, facilitate and advise. As some and many said to me afterwards, also to protect in terms of moving towards a merger so that there was fair representation. I received an email from Roger Mullen inviting me to come in and meet with him and John Kemp in the funding council. That was five days later. It was, sir. It was quite clear by the email that, in my opinion— Do you have a copy of the email? I have, sir. As you can provide to the committee? I can. It says in the email that, if you just bear with me, one of the thoughts is that you need to identify the appropriate person to act up as principal. This should be someone with ambition to seek a senior role in the new cohort. Excuse me, new college, et cetera. Now, at that point, I thought, and everyone understands the language of power in this room. When you are invited to meet with the Scottish Government and the funding council to talk about you leaving early, you know that your position is untenable. However, I circulated amongst the senior team, John Gray, and a few close friends. They all independently came by and said, you're not wanted. Now, can I just state that no one has ever said to me that I've done anything wrong? Quite the opposite. My actions at that point validate that I've done everything I should do. Having taken that advice, I went to meet with Mr Mullen and Mr Kemp in the offices. It was very quickly agreed that I would leave. The date is no coincidence, I'm sure, on 31 October. The first of November being the merger date between Motherwell College and Cumbernail College. I had to then go back. Did you discuss the sevens payments with them? No, right. No, we can talk about who knew about the sevens payments later, if you wish, I'm happy to do so. But I then had to go back in front of all college staff less than a week or so later and tell them that, unfortunately, I couldn't stay with them. So this wasn't someone who just wanted to get out the door quick. I wanted to be there to support staff and you, Mrs Gallum, have already alluded to the fact that none of my senior team, despite their achievements, qualification and experience, got a post and a large number of people didn't get posts. Despite the assurances that were given by Mr Mullen, Ms McTavish and others, that the merger would be fair and transparent and that it would not be a takeover. Mr Gray mentioned about the Auditor General's report and that he rejected that report. Do you reject the report in total or in part? I certainly object to the part that involved myself and John Doyle. Mr Doyle, do you have a comment on the Auditor General's report? Yes, I think that it is incomplete, inaccurate and vexatious. There was no collusion in terms of my voluntary sevens. It was based on a scheme for all colleges in Lanarkshire. Several weeks before I was due to leave, it was then changed, which New College of Lanarkshire was perfectly entitled to do. But it was a scheme that my board had felt that it would be one for all staff, every member of staff. Yes, I had enhancements to my voluntary sevens, and it was contractual for six months. That had been in my contract for nine years. I take exception to the way in which, as the Auditor General has said, limited evidence that our reputations have been absolutely trashed when we have done nothing wrong. As an employee—I would like to remind everyone that we are, as principals, employees as well—as an employee who was about to lose several years' salary, who left with a pension that was reduced, I had some rights. I did not contribute to the offer, I did not influence in any way the offer. On the basis that I was leaving early, I took advice and my lawyer said that I was losing all of that money. The public purse will be more than recompensed within a very short period of time because they will not be paying your salary and they will not be paying the contributions to pensions, etc. Can I mention at that point that we are talking about the Auditor General's report? However, your own auditor had concerns, your own auditor raised an emphasis of matter paragraph talking about serious government weaknesses on how the voluntary service arrangements were considered, implemented and reported, and the arrangements for senior staffing and salary approval. That is another independent body. Can I answer that and clarify it? There are two phases to this report. The first phase, if I may, is up to and including the 31st of October when I left. The second phase is there after. I respectfully suggest that the part that you are talking about is after John Gray and I had left. It is talking about the arrangements that were made and the discussions that took place after John Gray and I had left. Given the fact that the Auditor General appears to be in agreement with the opinion of the auditor and has raised specific issues, I can maybe quote a couple from the Auditor General's report on paragraph 25. Failure to meet the standards expected of public bodies and the use of public money, lack of transparency and decision making process for voluntary service arrangements, payments made that exceed the terms of the colleges, severance terms. I mean, I can go on down the list here. I mean, you can't just say it wasn't me. I most certainly would not. If we wish to go through each one of those, I'm happy to do so. Well, in all fairness, it might be appropriate if you could comment on them. In terms of openness and transparency, it was quite clear that the board, the new memberation committee of the board, and ultimately the board, were very well aware that there was, because of a change in the VS scheme, that there was concern by the funding council in Scottish Government. There is no question of that, but for the record, Bigot and Bailey were facilitating and advising the board and ensuring that they had all of the appropriate information. In terms of the auditor general, and I can only talk to 31 October, in terms of the auditor general's comments that we weren't transparent, I completely disagree. She may be referring to, although she doesn't make it clear, after we left. But by bringing in Bigot and Bailey, by ensuring that there was a completely independent clerk to the board, by ensuring that the board were getting clear advice on all aspects, including the funding council's guidance, including the Scottish Government and funding council's concerns, I had done my job. But the auditor general told this committee on 9 September this year that it was her professional judgment that there was a deliberate withholding of information from the remuneration committee, and her report itself says that there is no evidence that the remuneration committee had accessed the information and advice that it needed. Has anyone spoken to Bigot and Bailey? When were they appointed? As soon as there was a concern raised by the funding council, and we are talking as the funding council said, I am over a couple of weeks here, I think that we are talking from memory. I destroyed all of the things that I had when I left, but from memory, and I am sure that some behind me will correct me, I think that on 10 October the first concern was raised. I spoke to the chair and he said that we are planning to have our remuneration committee discuss it then. We then got another communication from the funding council and I responded to that verbally to say that the board was going to bring in independent advice, independent support and that there would be a full report copied to the funding council in due time. I also pointed out to the funding council that, given the conflict of interest, I had to correctly take a state step back. But the Auditor General states that the principle failed to take the steps needed to demonstrate that the inherent conflicts of interest were properly handled? I am not sure that the Auditor General was aware of the remuneration committee minutes. I am not sure that the Auditor General was aware of the role of Bigot and Bailey, of the reason why Bigot and Bailey was brought in. But would the committee not have had a responsibility to make that information available to the Auditor General? I am sorry, but I left on 31 October. It is a matter of a number of weeks between a concern that has been raised and me leaving. The Auditor General is basing in the report. What are we talking about here? It happened before 31 October. Can you be specific, please? I am looking at the Auditor General's report. I am looking at the issues that have been raised about the various things that have happened. Can you be specific, please? Did the remuneration committee meet before 31 October? Yes, it met twice. There is an absence of evidence that the remuneration committee had accessed the information and advice that it needed to fulfil its responsibility. So whose responsibility was that before 31 October? My understanding, sir, is that the remuneration committee was well briefed on all aspects originally in the first meeting by John obviously, and then the subsequent meeting by Bigot and Bailey, who had access to all aspects of documentation. The remuneration committee on 23 October, the remuneration committee meeting was clerped by Bigot and Bailey, and it was advised by Bigot and Bailey that it had all the documentation. So why was the college unable to provide evidence to the Auditor General that the remuneration committee had proper access to information and advice? You are going to have to ask others that, because when that audit took place, it was at least six to eight months after I had left. There is a timescale here in which the Auditor General has merged together, and you cannot actually tell, and that is why I defined it as phase one and phase two. Phase one, we acted very, very appropriately as soon as there was a potential, not a potential, but as soon as we were contacted by the Scottish Government funding council about there being two VS schemes. We did everything correctly. I cannot possibly talk about what happened after I left. Specifically during the month of October, there was a great deal of activity from the funding council. There was indeed. And they were having great difficulty getting responses from the college. That is not correct. I had conversations with John Kemp and with Lawrence Howells. There were emails back and forward where I had phoned them to say, this is what we were doing. I had made them aware that we were bringing in independent advice, that we were bringing in club to the board advice, and that I assured them that they would receive, in due course, a full report. That report, I understand, was given around 25 October, but do not hold me to it, because I did not see it, around 25 October by the new chair of the board. But according to the information, according to the evidence provided to this committee, there is no evidence of that. The evidence is quite clear, Mr Beary. Nobody, and this is what I find strange about the Auditor General's report to you, is that the keystone in all of this, in terms of phase 1, is the role that the college took in bringing in independent advice to provide the Immunisation Committee with all the evidence that they needed as my employer to make a decision. That happened, but at no point has anyone mentioned either the funding council or, indeed, the Auditor General has mentioned any of this. Nobody, incidentally, in this meeting today, has mentioned the fact that there was a Lanarkshire federation scheme. All of the language that has been used up until now has been that we have suddenly created this scheme for the senior management team and, to be fair, for the rest of the Coatbridge staff. There are still problems with the minutes and so on. There is evidence that suggests, according to the Auditor General's report, that pay rises were considered and approved by the Immunisation Committee, but only the decision to award the 2 per cent rise to all staff was recorded in the minutes. Why is not there full record in the minutes? I cannot answer that, and I am sorry to be repetitive, but the minutes of the meetings were done—excuse me—for the 23rd of October, after I had left. They were being facilitated and administered by— Is that you left on the 31st? Yes, I know, but I was not at the Immunisation Committee meetings. I could not and should not been engaged in any aspect of the Immunisation Committee meetings. It was being handled by the College's legal representatives, Bigot and Bailey. I had to have clear blue water between myself and the decision-making process of the Immunisation Committee, which I did. The timescales that you are talking about—yes, you are absolutely right—there was the meeting on the 23rd. There was the award ceremony all day of the 24th. There were two awards ceremonies and there was only a matter of days. There was only a matter of days for the Bigot and Bailey then to produce a draft set of minutes and circulate it around the Immunisation Committee. I would not have any locus to that whatsoever. Mr Dahl, your argument appears to be that it was not me. No, I am sorry, that is not correct. What about Mr Gray? Do you have any recollection of any of the points that are raised by the order general? I would just like to use the words that she has written in her report. What appears to have happened is the chair of the board and the principal work together to achieve a certain outcome. What appears to have happened, I would like to see on what basis she appears to have come to that conclusion. Also, she says later on, my professional judgment is that it was very unlikely to be an oversight. It was a deliberate withholding of information. I would like to see the evidence that she has got for that, because the minutes of the Immunisation Committee and boards completely cut across that, and communications by my successor as a board also cut right across those comments. I am just saying that maybe some of the evidence that we have and see has not been sought by the auditors. The auditors incidentally audited accounts for the year to March 14. It is like five, six or seven months after I left the college. The comments in that, the auditor did not seek my information from me or my comments on what she had apparently found and she did not speak to John Doll either. She wrote that report. Mr Gray, what you are saying is that there is additional evidence? Well, we think that there are minutes and correspondence that might or might not have been seen. We do not know. We do not know what evidence has been sought. All we can conclude is what has been said in these reports that we disagree with. We know exactly the actions that we took and we know that the minutes of the meetings were agreed. The minutes of the meetings were there. I cannot comment and I am sure that John cannot comment about the audit process that took place six months or wherever after we left. It was for new college Lanarkshire and the people who were still there. You are going to have to ask the chair, Tom Keenan, about that audit process. We have absolutely no knowledge. We knew that everything was being done openly and transparently. We knew that we were taking advice. We knew that the concerns of the funding council in Scottish Government were well expressed. The full board of management, as Lawrence Howell said, had a briefing for Lawrence and there was nothing that was being hidden. My employer made me an offer, which, on the basis that I was having to leave, I took. Can I go back to my earlier line of questioning? The SFC guidance on voluntary service is anyone for over 14-year service, 12 months pay, and you have been referring to the Lanarkshire one this morning. The other colleges that you keep referring to that went into new college, Motherwell and Cumbernauld, did they enjoy 12 months voluntary severance or 30 months? I understand, although I was not there. You must remember that I was the first person to go. There were no structures involved. There was clearly no place for me in the new college, Lanarkshire. It had just been introduced. I could not talk about its implementation. That is fine. I thought that I would try. When did you become aware of the Scottish funding council's guidance on severance payments relating to the merger of colleges? It is very fair to say that all boards are aware of it, and certainly our board would be aware of it through the college board intranet. All documentation—this has not been mentioned, either—anything that would come in, anything that would be put on our college board and management intranet. We have already heard from the funding council that you are both aware of the funding council guidance. I am very pleased about that. It is nice to get agreement now and again. The point that I am looking at is that the minutes are a bit sparse here with our remuneration committee minutes in January and the next ones in October. However, we have submissions from remuneration committee members, one from Ralph Gunn and one from David Craig. The committee members were advised that no specific guidance was available. That was relating to 28 January. From Ralph Gunn, the committee was clearly informed that they were being asked to agree with the proposals for your maximum 21 months and then you had the three months and the six months. They were told that that was in line with funding council guidelines for senior staff. My point is that you had the funding council guidelines, which was for 12 months. The remuneration committee are being told that the 21 months that they are being asked to agree with were in line with the funding council. It seems that the remuneration committee, although it does not seem, the submissions here state that the remuneration committee was misled and that they were not given the information that you had from the funding council. No, that is inaccurate. The funding council— The two members that have given us evidence have not told the truth. Well, I do not know. You need to ask them. I am telling you what the situation would be. We had a board internet that contained everything on it. I was not at the remuneration committee meeting in January or indeed in October. I cannot possibly have an opinion on what was discussed or not discussed. I do have an informed opinion with regard to the role of Bigot and Bailey in ensuring that all remuneration committee members were well aware. If that had been the case, and I am not saying that it was, but if that had been the case, would somebody in January have felt that they had not got all the information? They then certainly had lots of opportunity in October when they met again, when they were given every aspect by Bigot and Bailey. The decision for your 30 months was made in the 28th of January. At that point in time, the funding council had given you guidance to say that anything over 12 months was not acceptable. You had that information, Mr Doyle. Mr Gray, you had that information. We have evidence in front of us today that those on the remuneration committee who made the decision to give you 30 months' pay did not have that guidance. Is that correct? Did you not ensure that those who made the decision about the excessive payment to yourself, Mr Doyle, did you not ensure that they had the proper Scottish funding council guidance? I would like to hear from Mr Gray as well. Nor a problem. In the context of the paperwork that would have gone out and the conversation that they are in and the board internet, all of the remuneration committee members should have been aware of the guidance. The guidance, as we have heard from the funding council, is that they will not pay any more. But they were advised that no guidance was available. I cannot comment on that. I was not at the remuneration committee meetings. I can tell you. You must have taken a bit of an interest in what they were doing. It was pretty lucrative towards your bank balance. You must have had a little weaver. Let us see on what terms I am going to leave. You must have taken a wee bit of a passing interest. Not a passing interest, a real interest, but not to the point where I would influence the remuneration committee members. Not to the point that you would give them the guidance that they needed to adhere to the guidelines of paying your severance pay. You are going to have to ask both those members. The guidance was available on the board internet. I was not at the meeting of the remuneration committee when it was discussed. On that, I ask Mr Doyle and Mr Gray. Did you withhold any information from the remuneration committee prior to them making the decision on your severance agreement, Mr Doyle, senior staff and the other one? Did you withhold any information from that remuneration committee? I deliberately do not hold or unintentionally hold any information. Did you ensure that they had all the guidance required in order to make the right decision? The answer to that is yes, and over a period of time, first in the remuneration committee with the clerk to the board providing all the documentation that the board internet had all the information on it containing the guidance and thereafter again, and I am sorry for repeating myself, but that is what happened. For absolutely ensuring that we had an independent support that would look at every aspect of the process, particularly the remuneration committee meeting, particularly the guidance, particularly the funding council and Scottish Government concerns about there being two schemes. If I was wishing to collude as being alleged, if I was wishing to hide, I would not have brought in an independent company or suggested bringing an independent company who would not only advise the board and ensure that they had every aspect of knowledge that they should make to make a decision, but I then would not have got them to do the clerk to the board's duties as well. I did everything absolutely that I should have done to remain open and with integrity and I did that. I held nothing back from anyone. Mr Gray, did you ensure that the remuneration committee had all the information required because they said that they were informed that what they were being asked to agree to was in line with funding council guidance and they were another one talking about a lack of guidance? Well, all I can say is that categorically, nothing was withheld from any committee or board at Coatbridge by me at any time. Who chaired the remuneration committee? I think I was in the chair. Well, if you were in the chair, the committee members were advised that no specific guidance was available 28 January. Did you advise the committee that there was no guidance? I do not recognise that. I do not recognise that. Well, who advised them if you did not? You better ask them. Well, you were the chair. This is a critical part of evidence here. As I said at the very beginning, I feel that you have got to take a bit more of the context here. I mean that this was the start-up of the process and there were a lot of changes made right through and at the end of the day the remuneration committee were quite clear what was being offered, what the limitations were, what the funding council would or would not pay. At that point, there was no disagreement around the remuneration meeting or the board meeting as to what the situation was and what was happening and what was going to happen. Can I just read from the auditor general's report paragraph 17? The chair and the principal of Coatbridge College did not provide the college's remuneration committee with advice provided by the Scottish Funding Council. Paragraph 13, there is no evidence that the remuneration committee or the board were provided with detailed business cases and there is a further paragraph. I have got so many here. It is clear that the terms being discussed by the remuneration committee were not in line with the advice of the SFC and so it appears that the chair, Mr Gray, did not provide the remuneration committee with complete or accurate information about the evidence provided. I put it to you that you either concealed or withheld information from the remuneration committee and that committee, in all honesty, were misled thinking that they were agreeing to an excessive severance payment for Mr Doyle and others. They were misled thinking that what they were agreeing to was in line with funding council guidance and it was not. You withheld and concealed information from that committee because it was not in the interests of the severance payment for senior staff. Is that correct? No. That is the conclusion of the auditor general. That is a serious point. It is fine for her to conclude what she likes. I can say categorically that I never withheld anything from any of the committees that I was involved with. That is not what the committee members are saying. My final point, convener, is that I did ask it earlier. There seems to be a little bit more than a bit of local difficulty with Coatbridge coming into this merger. I now understand that some of the board wanted to go in and wanted to come out and it was back and forth. Who decided that you would go in, then come out and then go in again? The board was not unanimous. What were the reasons for this back and forth and why did you finally decide to go in? You are quite right. It was a very convoluted process. The timetable on which all of this happened is critical to the discussion. The original Federation idea of everybody getting together, the four Lanarkshire colleges getting progressed along a line. At a moment in time, it was announced that Motherwell and Cumbernauld were going to merge. That process happened without any consultation with the other two colleges involved. When we had our meeting to discuss that, it became absolutely clear that what the deal was, it was decided by Cumbernauld and Motherwell together that if we wanted in, we would play the game on their rules. No participation in this, no jobs for that, nothing. It was just a takeover. Surely the Scottish Government who facilitated this process, surely they were not going to allow a takeover. It was all about merger and partnership. Did the Scottish Government quite happy that you were left out in the cold? I agree totally with what you are saying. There is a lot of discussion about the subject and a lot of what role would Coatbridge play in the merger of the three colleges. My key aim was to ensure that staff at Coatbridge got a fair hearing on the jobs that were on offer. They never got any jobs, did they? Exactly. So why not? Well, you have to ask the new college Lanarkshire management team as to why they filled the jobs up and did not give any to Coatbridge. So, because of the focus on the mergers, and I ask you the same question that I asked the funding council earlier, there was a countable officer, Mr Howells, who was in charge of making the merger succeed. Every party in this Parliament supported the merging of colleges, that goes without saying. Because of the focus and the priority of the mergers, and because you were not really fitting in or you were not really very compliant, it seems. Did that then allow you to think, well, there is nothing in this merger for us? We will just look at enhancing our severance payments. Is that possible? Is that an attitude? Do not think non-secretary. As far as I am concerned, there is no connection between one thing and the other. None at all? None. Absolutely none. Not even for Mr Doyle being what was it? He was told that he could not apply for the post of principal. So, even though he was told that he did not even need to bother applying, that did not affect your question for severance payments. It is nothing about bothering to apply. He was not allowed to apply. That is what I am saying. That is quite a different set of circumstances. He was told that he could not apply. Exactly. That was six months later. So, because no one was getting anything out of the merger, you just thought, well, let's focus on the severance payments. We've got nothing to gain here. No, I think what happened was that because the process of the merger with Motherwell and Cumbernauld was progressing, we had to look carefully at that. Are we going to be compliant in order to make real progress, or do we just stick our heads in the sand as the South Lanarkshire people tended to do? They are still out of it. We argued strongly for proper representation on committees, the board, etc. A lot of that was not forthcoming. We went out. The board talked about it outside at Coabridge. No, no, we think that we really have to play, we really have to get into this merger. It's a thing that's going to happen. We've got to be in there to do an influence at the best way that we can, and that's why we're back in again. That's where we ended up, and, as you rightly say, the amount of staff positions that Coabridge team got was zero. The clarity of the records in the minutes, can you explain Bigot Bailey? Bigot Bailey was our legal representative who advised the college and the board on all legal matters. In the context of the support for college board of management, it would be in the main equality support, human resource support and advice. When were Bigot Bailey brought in for the specific dates? Well, from memory, we received the first communication about 10 October from the Scottish Government. I spoke to the chair immediately and said, look, we've got a concern here because there are now two schemes, the new college Lanarkshire scheme being introduced a couple of weeks beforehand. John, as I said earlier, immediately said that we would discuss it at the Renumeration Committee, which was already planned. We then received a funding council note of concern. The clerk to the board in doing her job very well said, look, you really need to have something independent here. We should do two things, and that's when we suggested to the chair who readily agreed. The first thing that we would do is bring in Bigot Bailey to sit with the Renumeration Committee, and this is very important given the last series of questioning, to make sure that they had all the advice, all the information, all the documentation, every single piece of information that you would want, as a member of that committee, to make a decision on 23 October. We can get all of that from... Well, I'm surprised that the auditor general has put that in the submission. I'm assuming that we can get all of that information from Bigot Bailey, so we'll ask the clerk to have a look to get that information. Can I just say, though? Of course. Can I just finish just this for another question? It's all about timing and dates. It is. So that's the 10th October that Bigot Bailey was talking about. Round about 10. We're talking dates. Yes, 10th, 12th, 13th, whatever it may be, for that specific issue. You left on the 31st of 2013. That was my last working day. Now, you had a bank payment put in all backs on the... Just before the 23rd of October. 25th of October. So we'll get Bigot Bailey brought in the 10th or 13th of October. That's correct. For that specific issue. That's clarified. We'll get the minutes, hopefully, of that. And then you actually had a payment through the back system on the 25th of October to do with your renumeration, your two years, your six months. Well, if I... Just if you let me finish, I'm just trying to get the time and the timescale. So that's all within the month. And you left on the 31st of October, which, in the minutes, is the 1st of November. I'm just... It's quite a timescale. So I just wanted that on the record and who Bigot Bailey is. If I could actually go back to something else at the very beginning to clarify, I could get quite confused in this particular issue here. Now, we've got the measure of the colleges and we've got the Scottish Council, funding council. They have their legislation stipulations about how severance pay should be made 13 months. Now, then, we hear evidence today that actually that wasn't there within the college because we have something called the Lanarkshire Federation Scheme and the Federation Action Plan. Which you mentioned was for all of the colleges. What I can't quite understand is why didn't all the colleges go for this? And only, quote, Bridge College went for it. And I think from taking down notes that you've mentioned, the only reason that you mentioned that was because you said you spoke to the EIS in unison. Yes. So could you maybe clarify that point? I've been delighted. Because we've got EIS in unison now involved. You say you took advice from them. No, no. But maybe I've picked it up wrong. All right. I was just saying, I've written this down, that you spoke to them and then we had the Lanarkshire Federation Scheme and the Federation Action Plan. And the only people that's put that in forward is quote, Bridge College. And the only people who actually benefited from it was yourself, Mr Gray. Well, Mr Gray didn't benefit from anything. Mr Gray didn't benefit. Well, I'll come back to that if I can, possibly. Can you just try to keep questions and answers? Oh, sorry. It's just that, you know, I think this has all come in all of a sudden. So can you tell me why? I'd be delighted. Why did the rest of the colleges not take that one? Well, can I just, first of all, as an employee, the BACS statement, just so that we've got a clear guidance on that, very quickly. As an employee, all employees in the college are paid in the 25th. As an employee, I was leaving on the 31st. So my HR department would have processed that BACS payment. Can I just say for the record, the incoming chair, my, sorry, the director of finance, Derek Banks, spoke to the incoming chair and asked him, as the new chair, did he want the BACS payment stopped? And he said, no, the numeration committee of all the facts, they made a decision, let it go through. And the terms of the new college Lanarkshire, new college Lanarkshire, sorry, in terms of the volume 27 scheme for the Federation of Four Colleges, it was proposed by South Lanarkshire College in November 2012. Their board had adopted it. The action plan, a minute for all the other three college boards. And remember that the Scottish Government, the funding council, chairs and principles were all at these meetings. And it was decided that that would be the preferred scheme, which is the scheme that you're talking about 21 months. I spoke, as I always do, to my trade unions about the scheme and asked them to go and meet with their officials and talk to their members about the scheme in order that when I was briefing the board, I could, as always say, have engaged with their trade union partners. And whilst they would have objections about people post having to be left, there were no real objections to that. It was the EIS and Unison reps who briefed me about mid-September that there had been a change in plan and this new scheme, a much-reduced scheme, had been introduced by a new college in Lanarkshire. Sorry, that was in September. That was in September, a couple of weeks before I was here to go. So when they briefed you, we're into the EIS now, in unison. So when the trade unions EIS and Unison briefed yourself that basically there's a much-reduced scheme coming in, did you alert the other colleges to that? No, they were all there. They were all at the meeting. They were all at the same meeting. Yeah, I wasn't at the meeting. Oh, you weren't at the meeting? No, the point is that I know it's... It seems rather strange because you know so much about various meetings but you never seem to have been at them. So I just would like to... Sorry about that, but... It's one of the things about being principal as has been alluded to. The board of management at Coatbridge College had decided quite correctly that as I was leaving in John Gray, I decided to leave at the same time. We needed continuity, perfectly acceptable. The board elected Tom Keenan as the chair and two new vice chairs, Karen McCarthy and Paul Gilliver. It was established that, and it's come back to you, so bear with me, that Karen McCarthy and Tom Keenan would represent the Coatbridge College board of management at all the merchant meetings. And that made a lot of sense because they were going to be there after I'd gone. I mean, I understand that, basically, but if I could move on, we've still haven't got to the bottom of the fact that the other colleges did not accept us, but your college did. South Lanarkshire, I have no idea if it's still on the books at South Lanarkshire, but it was adopted by them. I think that I would quite like if we were able to look at this Lanarkshire Federation, maybe we'll have to bring in EIS, I don't know. I would quite like to see exactly what this was because it's new to me, but if I could just carry on, I mean, you mentioned the fact that Mr Gray maybe benefits the wrong words, you know, the severance payment, wrong to say whatever it may be, but I also want to ask, you've adopted this, which is a far more enhanced payout than any other colleges and against basically the wishes of the Scottish Funding Council. Now, for what we can gather is principals, senior managers, a member of staff in the principal office, they received these enhanced payouts. I'm not sure that's correct. Okay, so you deny that then? No, I'm not denying anything. You say that you didn't. I'm suggesting, I'm saying to you, sorry, that again, there were two phases to this, phase one up until the 31st of October and phase two thereafter. Now, my arm... Sorry, I've correct me from wrong though, but you weren't there after the 31st of October. No, I wasn't there. So really, you're not responsible for having any enhanced payment you got at all. No, that's not... No, no. Is that correct? That's not what you're saying, because every wisdom of ours, you've said you weren't present there. No, I left on the 31st of October. The people you're talking about were there long after the 31st of October with a new board chair who looked again at the severance arrangements for those six people. That was after John Gray and I had left. It should be a matter of record that on the... And I'm not... Nobody's raised this. I'm not... It's a matter of record that the Renumeration Committee on the 23rd, with all of the facts, and I repeat, all of the facts, made a decision to re-look at the severance scheme for the senior managers and with regards to the pension arrangements for the principal. In short, the severance arrangements were reduced and the principal's pension contribution was reduced. Basically, there's so many different dates as you mentioned yourself. I think I'll come... If I can come back again, even if it's all right, I wanted to raise conflict of interest as you... Obviously, you said you were never at the meetings, but Mr Gray certainly was chair of the board who's put these forward. But I'll come back on that, if you don't mind. Is that all right? Okay. There is a bunch of something. Can I just try and clarify it for myself? I mean, it is quite complicated. There was the scheme, which was the South Lanarkshire adopted scheme, that all four boards were looking at at the beginning of the process when it was being considered as a merger, which you were in and out of. But as far as you were aware, and as far as the board, Mr Gray, was aware, that up until September, the scheme that was going to be adopted across all four colleges was the scheme that originally had been proposed for South Lanarkshire and adopted by South Lanarkshire. Yes. It was only in September when Tom Keenan, as the new chair designate, went to the meeting with Tom Gulliver. Tom Gulliver? We went with Kara McCarthy, I understand. Kara McCarthy. When those two gentlemen went to the meeting, at the joint meeting, they learnt that there was a new scheme which was going to apply, which was the 12 or 13 month scheme, instead of the 21 month scheme. That's correct. Okay. So, at that point, your Immuneration Committee then, then, on the basis of discussions with Bailey, with Bigot and Bailey, they made the decision to continue with the original scheme, but only for the top management, not for all the staff. Is that correct? No, that's not correct, sir. Right. What is correct is, I need to speak to the chair, because he was there, but my understanding quite clearly is that the Immuneration Committee looked at the scheme for the principal and the senior management team, because that was the people who they were focused in on. It would be a different committee. It would be the full board that would look at the adoption of a VS scheme, not just the Immuneration Committee. The reason that I can explain is the people that we're talking about, the principal and the senior team, are employees of the Board of Management and Colleges. I have no idea where it's like now, but at that point, it was established practice that the principal and senior members of the team were not employees of the college, they were employees of the Board of Management. That is why I refer to it as my employer as the Board of Management, not the college. Those are two different entities, then? Correct. So it's even more complicated than I thought. The Immuneration Committee originally had an aspiration to pay everybody the same amount, and it then became, was converted to an intention to do that. But finally, it turned out that only the senior management got the enhanced payments, not the rest of the staff. My understanding is that I was the only one who got the enhanced payments because after I left that meeting, the chair by John Gray looked at the senior management team who they'd hoped would all get posts within the new scheme. Given the contractual arrangements, we need to speak to John about that. I understand that he felt that they were legally bound to pay what I was contracted to receive. Fine, so somewhere there is a business case for that? In terms of my... Yeah, in your package. I understand that there's two things my understanding is. One is that because my post was closing and doing a member that in August of the three colleges, the only post that was definitely closing was my post. As I was effectively being made redundant, there wasn't a need for a full business case. Having said that, my understanding is that in the meeting of 28 January, they discussed all the aspects of why I would receive the package that was offered to me. Okay, fine, thank you. Okay, Tavish Scott. Thank you, convener. Can I just ask Mr Gray, since Mr Gray has just mentioned 28 January, you very sensibly asked Mark Bathwell, the then chief executive of the funding council for advice on severance four days before that meeting on 28 January, and he then provided you with, I guess, what the entire document as to how severance payments should be or their guidance on severance payments? Possibly, I don't... Quite honestly, I can't remember getting the document, but if it's in there in the record book, I must have got it. It's a matter of evidence in terms of the committee. So I must have received it. You may not recall this, but do you recall what you did with it? Did you then circulate that to the members of the remuneration committee given this clearly, given this issue? Well, as I've said earlier, it's not my practice, and it never has been, to be secretive and do things behind closed doors. I think the natural process of communications would have been to circulate that to the committee. If it wasn't done, then that may be my fault, it may be the secretary's fault for not doing it. I really can't, I really don't know. But if I can interject and inform... On the committee, as I've said earlier, that the all documentation was on the board internet. Yeah, that's not what I asked, Mr Doyle. Sorry? Was it circulated to the members of the committee at that committee? As you weren't there, you don't know that, I'm assuming. Clearly from evidence, as we've heard, some people did not receive it. Indeed, okay. For whatever reason, I can only say that that was not done as a deliberate withholding of information. At that meeting, Mr Gray, a proposal was obviously tabled in relation to Mr Doyle's severance. Now, was that a written document? That was the Lanarkshire scheme that he's talked about at some length. That's what was on the table. And at that stage, because we knew that the merger was coming up, we had no VS scheme in Coabridge. So we put one in place, which we thought, in all innocence, was going to be the one that would apply to the whole of Lanarkshire. And that was in place for the college at large and the people who got offers, as it turned out, for senior managers and John, as the thing materialised. That's all fine. And that's how it arrived. I'm just seeking to clarify who tabled that proposal. Was it tabled by the Secretary to your Renumeration Committee, or do you recall? I can't honestly recall. Someone must have written the document, I guess. Yeah, it was a document written by South Lanarkshire College and circulated to the four colleges involved in the proposed merger as a proposal for the Lanarkshire voluntary severance scheme. And then did you have a discussion at that committee? I appreciate this at some time. Did you have a discussion at that committee an oral discussion about the proposal you were going to make in relation to your principal and chief executive? Well, I think the scheme was laid out and that, in those terms, he would qualify for that scheme. And that was then ministered, as such? As far as I'm concerned, it was. And the senior managers would also qualify for that scheme. Yeah. But then, as Mary Scanlon was pointing out to you earlier, two members of your committee that you know well, presumably were at that time good colleagues and that kind of thing, absolutely disagree with that interpretation of events. Yep, I can't. That must be a source of some regret to you that there's that difference. Well, it is because I feel that in all the efforts I made at Copebridge over 12 years as chair, I tried to make sure everything was done open honestly and clearly. I take that. But I guess we're trying to understand why those two colleagues so diametrically disagree with that interpretation of events. Could you shed any light on that? I might have to go and call on them. I think I'll not go there. Right. Let me ask a different question. Can I just add that the discussion about the senior management team getting enhanced groups, they did not. They got the fact that, and I was there when the managers were offered, had offered letters in their hand at the enhanced scheme and were requested to reject those and accept the scheme that everybody else accepted and they did credit to them. Yes. Thank you. Can I, Mr Dall, I wonder if I could ask you a couple of questions about the evidence you gave early on to the convener in relation to the document that was tabled in July on the merger of the colleges. You said, and please correct me if I'm wrong, you said you couldn't apply for the post of the new principal of the college. Is that correct? That's correct. But was it not publicly advertised? You would need to speak to the people who are facilitating the interview process. So, Dall, you're a principal in the college network across Scotland. Do you not read the head holds appointment speech and that kind of thing? Was it not publicly advertised? I think it stopped reading the papers. My understanding was advertised. So you could have applied for the job then? Well, it was a merger between Motherwell College and Cumbernauld College at that point. This is July? Yes, that's right. It wasn't a merger between the colleges. I thought you were already, by that time, Corkbridge were back into that... No, no, no, the... Into the merger proposal. And it's going back two years. I wish I had a knowledge of what's going on around me, the specific dates. No, I'm absolutely quite convinced that the interview process for the principal elect for Motherwell and Cumbernauld College was before July because when Roger Mullan and Linda McTavish came to see John and I in the college, they had within there that the principal would be Martin Boyer, the principal elect, U-Collins Lanarkshire. So they'd gone through the process. When did Corkbridge College get back into those negotiations over being a member? That was at that point in mid-July where Roger Mullan and Linda McTavish came to the college and said, look, we know that as has been stated, Corkbridge College board had from the very early days said, look, given the economic circumstances, merger is the best thing for Lanarkshire. So we had said that from the off. What we now had was a situation where two colleges, as John said, without consultation had decided to merge, which they've perfectly helped to do. The board of management met to consider that development and as a board decided to embrace the merger and go into the merger. Unfortunately, which is widely known in Lanarkshire, the board then, given the circumstances about the first merger, regretfully had to withdraw. And quite simply, it was because there wasn't any effort at all to bring in people on what's called the work streams. Now, if you know anything about mergers, you'll know from a curriculum leader or teacher's point of view and support manager's point of view the work streams are everything. And we weren't getting an opportunity to engage in the leadership of any of those work streams. The board of management then made a decision to regretfully withdraw from the first and that was earlier on. And then in July, the board of management then decided to go back in with the assurances from the Scottish Government rep and Linda McTavish and others that it would be fair and it would be transparent and I think that Mrs Scanlon has given us a clear indication of how that went. So the July document said that the merger will take place and the principal's post is already filled. And then you said earlier to the convener that you were presented, I can't recall the terminology you used, whether you got a phone call from Roger Mullan or an email or you were presented with a paper which effectively meant that you were, whether you had no post to go to. No, that was in the July meeting because it effectively made me my post redundant. I'm on the basis that the board which they did then accepted those measures. Okay, so what then were the meetings on the 15th and the 20th of August about? First, the 15th of August, Mr Gray, that was the meeting you had with the Scottish Funding Council and Mr Kemp and Mr Roger Mullan. What's your recollection of what was discussed that meeting in relation to Mr Doyle's position? I can't recollect the meeting at all to be a powerful audience. I've got no paper work that supports that. But in the discussions I've had with the Funding Council over quite a long time, and I worked in the, I was in both funding councils for a period, both the Further and Heritage of the Funding Council. I was a member of the council. I know them well, they know me well, and they know that if there's an issue, they'd pick up the phone and tell me. And we never had any of that kind of discussion. So I think— So do you think it'd be fair to say, as Mr Kemp said earlier on, there was no discussion at those meetings about the severance payments in relation to the store? I think that's correct because the schemes that were on the table and John Haddie's offer, based on the Lanarkshire proposal, and that was what was sitting there. And nobody questioned that. I think it was when it came out later that the proposed scheme, which is the scheme that it finally went in, was a much lower effort that it then became an issue. And I think the, just while we're on that subject, we need to be quite clear that six months of what he got paid was a contractual payment. It was nothing to do with the severance payment. That was a contractual payment for payment in lieu of notice. And so that would be something that any person sitting around the table with a contract of employment will know about. So the compensation of 24 months, and I thought it was quite interesting, and John Kemp said that it wasn't unusual for colleges to pay more than that. He said that this morning. And but it was made clear from the funding council that if they did that, they had to find the extra money themselves, which is in fact what they told us to do, and which is what we did. They told you that? Yeah, absolutely. You had to find extra money? Absolutely. They would only pay the limited sum, which they did pay, the excess of that we had to find ourselves, and that came from commercial income raising. It wasn't public funds. And you could just, that's an important point about where that money came from. You'd be able to provide or you'd be able to provide the committee with some, the evidence that backs up, that statement that it came from commercial, the annual accounts for the last several years, the annual accounts come to this committee, you will note, and I'm sure the clerk to the board will be easily enough to look back, you'll note that the reports about Scotland's colleges every year saw a Coatbridge College with a surplus. The board recognised very early on that we had to develop substantive alternate income sources because of the cuts that were imminent and then were put in place. But despite that, the staff that a magnificent job in developing commercial, international and European funding sources which supported the students and the staff and the colleges as a whole, a very good example of that, and this Parliament provided the majority of the money, was a complete refurbishment and rebuild of the college campus. Because of the alternate income strategy by the board, we had no loans. So there was no legacy of loans to build this magnificent campus. Okay, thank you. Okay, chairman. Good afternoon, gentlemen. Good afternoon. Just a few questions in terms of the remuneration committee. The committee met on the 28th of January and the 23rd of October. Would that be quite a common thing for a remuneration committee not to meet a great deal over the course of a 12-month period? Yes, the remuneration committee would only meet to discuss the terms of conditions of payment for the principal and the senior management team. The executive committee, the only difference being the principal with my attendance, would meet irregular as well to talk about paying conditions for staff. And it would be that executive committee on receipt of a pay claim by trade unions that would set parameters, look at what was being paid and, for example, in Lanarkshire, look at what we could afford, if anything. And it would be that executive committee that would deal with the majority of staff. Okay. So, earlier on in one of the answers you gave Mr Doyle, you did say that you did pay attention. Also, you weren't at the meetings, you weren't entitled to attend the meetings of the remuneration committee, but you did pay attention to also what was going on. So, I take it that you probably saw the agendas beforehand and then I take it that you will have looked at and read the minutes after the meetings took place. In normal circumstances, that would be exactly what happened. With regard to the minutes of the remuneration committee in October, I had left, clearly, because the meeting was in the 23rd. Bigart and Bailey were doing the clerk to the board. It would have to then go to all the remuneration committee members for approval, so that would have been sometime November. But in the past, yes. You mentioned Bigart and Bailey, because it takes one to them. They were brought in to the college at quite a late stage. As soon as there was a concern that there were two VS schemes in operation. Is that quite a usual process to have an external organisation clerking of a committee, of a public sector operation? You are absolutely right. It is highly exceptional, and it goes to the core of what I have said to the committee about what the auditor general's findings are, what I call phase 1. The clerk to the board, who is an excellent clerk to the board, remembers that for my tenure, nine years, there has never been one issue in the funding council. There has never been any problem with our accounts, not one, apart from getting lots of awards. As soon as we understood that there was a problem, I understood my conflict of interest. The clerk to the board understood her professional conflict of interest, and we took the exceptional steps of advising the chair and the enumeration committee so that there was complete honesty, complete transparency, by bringing in somebody's separate. You are quite right. It was highly exceptional. But we, the clerk to the board and I, and ultimately John, felt that it was very important, otherwise we would be accused of exactly what we were accused of doing. Why this particular company? They were our lawyers. They were our lawyers. So just because of the lawyers? Well, remember the timescales were there as well. The lawyers could provide more than just internal and external auditors could provide. They would have an overarching approach, particularly given the legality of payments to the senior staff, including the principal. They would be able to provide correct advice in terms of whether the board should have or could have continued with the agreement that they had with the principal. So it made, it was a sound choice to make, given the circumstances. On an email from the Scottish Running Council to Mr Gray on 22 October, I mean, some of what I've just highlighted is in that email as well. On the email, it talks about regard to the guidance and volunteer servants arrangements. And also the fact that Mr Gray, I mean, you were contacted earlier on in the year in January. And that particular email was attached to the correspondence. But certainly given the situation that was actually developing, it was stressed in this email that there had to be a focus on the guidance in relation to position of the principal and that guidance being the guidance from the SFC. Now, with that being the case and with the board meeting to take place the very next day, was that guidance then reissued to the members of the Remuneration Committee as compared to the expectation that the guidance will already be on the intranet system and that members should automatically I don't believe it was, but one got to remember that Lawrence House and Company were coming to the meeting the next day, both the Remuneration Committee and the board, and were able to deliver their message verbatim. And there's a good discussion with them there. They were able to say whatever they felt they had to say, which they did in the minutes out there. And I think everybody had a fair chance to question or challenge any of the sort of things that were developing and any of the payments that were being proposed. I think the abundant, as far as I'm concerned, it was abundantly clear from the funding council that the guidance, they would not pay, not reimburse the college with anything more than the guidance amount. And it was up to the board then to decide if they were going to go and pay more than that, as it has been done in other boards which was mentioned this morning. And the board had an opportunity to discuss that in full. And agreed at the end of the day that that payment should be made. The reason for highlighting this particular point is just that the Remuneration Committee, as we've already heard, it's met twice. Of course it has that particular focus on remit. So with the only meeting on two occasions then there's a possibility that members of that committee might not have the Scottish funding council guidance as a regular reading material. And as we've heard, it is already on the intranet system but people might not want to go to the intranet system to have a look at it. So with the committee only meeting on two occasions, I would argue that it could be reasonable to ensure that at very least the link is provided to the members of that committee when the minutes are sent out to them before they actually have the meeting and just to remind people to have a look at that particular document. Certainly from what I've heard so far that may not actually happen. No, you're absolutely correct apart from the last part. That's why we brought in Bigart and Bailey to ensure that the Remuneration Committee had all of the evidence, were well aware of the concerns, sort of all the evidence, all the guidance, were well aware of the concerns of the funding council and the Scottish Government and were there in position by a senior partner of the firm to advise the board on any questions that they may have on the legality of it, on the process of it, but it's fair to say that Bigart and Bailey provided all of that because the reason I know that, although I wasn't in the meeting, is that I spoke to Paul Brown when we engaged him to say, look, you've got full access to the board and the college intranet, we're sending you all the documentation, all the letters and communication from the funding council and the Scottish Government, and at that point I said, Paul, because of the conflict of interest, as you know, that's why we brought you in and I now have to take a step back. I am absolutely convinced that a company of that ilk and a person so senior with their team would have provided all of the evidence to the Remuneration Committee. Nevertheless, that very same evening, Lawrence Hills came and briefed the full board, which included the Remuneration Committee. So everybody had the facts. At that evening, the Remuneration Committee changed the conditions of severance for the senior team and with regards to the principal's pension. Are you content that all the information was passed over to the representative, so on, Bigot and Bailey? Absolutely. Thank you. Thank you. Thank you, Don. Thank you, convener, and good afternoon, gentlemen. Absolutely. I'm wondering if I can just go back over what Mr Doyle has just said, but with Mr Gray, on the basis that and I've listened to everything that Mr Doyle has said. Could I first of all confirm, please, whether the Remuneration Committee on 23 October met before or after the board meeting? Before. I'd imagine that would be the case. Thank you. Could you please give me your version of what was said, what was done, how that was managed? I don't know what a clerk does. I know what they do here, but I don't know what they do in the context of that. And given that you were chairing that meeting, can you give me some feeling as to what Paul Brown from Bigot and Bailey actually did, please? Well, I'm assuming somewhere in the paper work the minutes of the Remuneration Committee and the minutes of the board of the 23 October are in your paper somewhere. Can I forgive me? Would you please work on the assumption that I haven't gotten and could you please explain on the record what you believe happened and why Mr Doyle is entitled to the view that he's very clearly expressed that everything was done transparently? Is it open and transparent about it? There may be issues concerning the data that's provided in the Remuneration Minutes. We're currently looking at that so that we can explore further how we can ensure that that information is disclosed in terms of the Remuneration Committee minutes. We actually, these minutes have not been published on the website so we are not in the position to refer to them but we have been provided with them in confidence. So they are private papers. Which is why, thinking convener, why I'm asking you to take me through on the public record, please, what you believed happened obviously done with every word but what's relevant in the context of the specific advice that would have been given to the board, the way that would have been handled in order to justify, Mr Dawls clearly stated that it was all handed publicly. Which I'm not, for the moment, doubting, I want to hear it evidenced by yourself, please, as the chair of the board. I've got half an hour. The chair of the... Well, if it takes half an hour, I've got half an hour. I'll read out the minutes of the meeting. Take half an hour but just give us a very, very, very... Yes, I understand that. ...in three minutes. The minutes of the meeting run to three pages of full-scrap in small font. Size. So it's quite a a voluminous document with a lot of detail in it. I'm very happy for you to edit that to take out the voluminous detail but let me be clear that if I had to read three pages in small print it wouldn't take about half an hour and I have got half an hour. Sorry, can we just clarify to member we actually don't have half an hour to get through that? I understand that. Can I just ask Nigel Dawn we're looking for a one-minute overview of what was described to you by Paul Brown who was the leader in the meeting. That's all we need for the moment. If you're not able to provide that then maybe Mr Dawn can change his line of question and we can follow that up and right. Forgive me, convener, but that's exactly what I want to hear. I've heard Mr Doyle explain what he intended to happen which I respect. I would actually like to hear from the man who was there and is in front of the committee telling me how that happened. Please. Well, I mean, I really don't know how to tackle this question. I've underlined a number of lines in the minutes which seem to me to be important so maybe I'll just tell you what those are. Paul Gilliver agreed with Carol McCarty that the Edinburgh policy was not agreed at the 20th January 2013 meeting and this was referring to the staff getting enhanced payments and they had interpreted the thing as being a meeting, the January meeting being to talk about the principal's severance not staff's severance so that came out in the discussion. They did not agree at this point, the committee did not agree to the item relating to the senior management team so that was the thing that we've talked about earlier where the senior management team were originally offered an enhanced package and this was being discussed at this meeting and point 6 here, I'll just call the actions, the committee approved the 28th of January 2013 meeting minutes but the reservations of both Carol McCarty and Paul Gilliver who disagreed with the Edinburgh policy was agreed and noted that was the point to do with staff enhancement. The committee approved that the Lanarkshire voluntary servant scheme offer the introduced and made available to the senior management team and all other staff members with effect from the 1st of November 2013. The committee confirmed their approval of the principal's package as 21 months, three months for taking manager forward and the six months payment in lieu of notice so that was discussed and agreed at the demuneration committee on that day. Right, thank you. Can I just ask you whether the minutes say anything about an input by Bigot Bailey? They drew the minutes. Well, now I was looking for an input because the suggestion has been that they provided advice to the board. I'm sorry, pardon me, to the remuneration committee. Does the minutes actually say as much? No, the minutes record the meeting but it doesn't talk about them themselves. There's no minute involving them saying something and a meeting. That, I would suggest, is one of the reasons why other people may have drawn the conclusion that there is no evidence. Does it actually say they're there? It says yes. Attending Paul Brown and Victoria Cowan and both of DWF LLP are minited as being attendants. Apologies from Ralph Gunn, who was one of the board members. And the other present myself, David Craig, Pauline Docherty, Paul Gilliver, Tom Keenan and Carol McCarthy. That's where the people who were present at that meeting. Do the minutes give us any indication of what was done other than what was agreed? What was done? Well, exactly. I mean, minutes often say it was agreed X, Y and Z. Do they say anything? Before that, there was a discussion about this. There was a presentation by YY. Before the discussions took place in an underlying all those present at the meeting on 20 January, John Gray brought the discussion to a close, etc. He said there's a whole load of narrative here about what was said and done and discussed at the meeting. And Bailey Bigot, on Bigot Bailey, pardon me. And they minited all of that? Yes, but did they contribute to it? No, it does not say they contributed to it. Thank you. That would then I would suggest provide some evidence for the feeling that there is no evidence that they actually made an input. And we're not denying they were there. Not necessarily denying that they had any input to writing at the minutes. But if I were looking for evidence that they actually provided independent advice to the remuneration committee, then if I've heard you were right, that doesn't provide any such evidence. I'll say it didn't happen, but there's no evidence of it. May I? Please. Paul Brown, the college's legal advisor, at the chair, you're going to have to keep me right on the legality here, for what I can say. But it's quite clear. I mean, just to be clear, I just want to make sure everyone's aware of this, that there are issues in negotiation concerning this document, but we would want to ensure that every document's published and we're working towards that. So just make it clear. Can I just say it? This is very tight script and this is a very stressful environment. However, to answer your question, Mr Dawn, under paragraph 3 in the funding council, the college's legal advisor addressed the committee in relation to the issues raised by the funding council. Paul Brown advised the committee of their... I'm going... Do you want me to read it by Baton? Forgive me, I think you should stop there. I think if you've said Paul Brown advised the committee, that's all I wanted to hear. We'll worry about what he said separately. There are absolutely sentences with the answer there. Forgive me to stop there. If we're not concerned, if we're not sure about the legality, let's stop there. But thank you. There was a lot of advice to the committee. And the reason I know that, is that I read the minutes. I wasn't there, but I read the minutes. Thank you. Thank you, convener. That takes me where I want to get. Okay. Now, very brief supple entries. I've got one from Colin Beattie. That's me, convener. We've talked a bit about Bigart Bailey, and they are, or were, Coatbridge College's legal advisers. You engaged them to take on this additional task. Was there a cost involved in that? Most certainly would have been. Any idea of what that was? I would imagine several thousand pounds. The reason I won't have an exact figure is, and I'm sorry to sound repetitive, but I left in the 31st of October. The board would have, I presume, continued with the services of Bigart Bailey. So I couldn't tell you what a figure would be if they had continued for another meeting or several meetings. Presumably you would have fixed some sort of a remuneration rate. We had standard challenges well established, so yes, the answer was yes. And the cost of this aspect of the work purely related to the potential conflict of interest for yourself? No, absolutely not. It was about the concern by the funding raised, by the funding council and the Scottish Government on two VS schemes. The fact that I, as the principal and chief exec, and the clerk to the board, there was a real conflict of interest, we discussed with the chair that we readily agreed quite rightly that we needed somebody to come in and support the remuneration committee to ensure that the remuneration committee had all of the facts and could make a decision whatever that decision was, they would make it in an informed opinion and the minutes of the remuneration quite clearly show that, both from the advice that the remuneration committee were given and the dialogue between members. It was money well spent. Just something that hasn't been raised today. Paragraph 16 in the Auditor General report. Member of staff in your office, John Doll, as principal, received a pay increase of 19 per cent in January 2013. That was in the middle of the public sector pay freeze. It was approved by you, but there was no record of why this person was given the increase. Could you perhaps say why you approved a 19 per cent pay increase for a member of staff in your office at that time? Yes, I can. It was an operational matter of which I was in a perfectly entitled to do. As has been indicated before, the 19 per cent increase sounds a lot and it would be in my salary but not the member of staff's salary. The reason behind it was quite clear and I stress again that it was an operational issue. One, that I understood from many principals who have gone through a merger that they would lose their senior staff as soon as we went into merger talks about work streams. If what was the salary of this person? Oh, I have no idea. Well, you just said it was... Well, it's about £20,000. £20,000? But I couldn't tell you whether or not that was after or before but if you let me explain it, it will be quite clear. Yeah, because there's no record. Well, I'm going to talk about that as well. It was quite clear that from speaking to many principals and people who had gone through a merger that as soon as merger talks started and it came to pass, all of the curriculum leaders, all the support managers and senior team would be at all over the place in colleges, at different colleges talking about and quite rightly so, the development of the new college, what curriculum they would offer, what support services, what structures would look like. Now, I understood that very much as did my board. And what we needed to have was a continuation of the excellent educational service given to that cohort of students. I needed somebody who could work with me on a 24-7 basis who would be able to communicate effectively, understood how the college operated and was known by staff. The first thing that I looked at was providing unlimited overtime to that person but that really wasn't going to be effective. The second thing that I looked at was looking at bringing in somebody separate to assist me in that because I needed assistance, I needed someone to come with me and work through the day-to-day running of the college, particularly in communication. That individual was a communication expert who met all the criteria. I, of course, put all the paperwork in her personal file and I'm surprised, when yet not surprised, that the auditor didn't find that evidence. There's no record of the additional responsibilities. Can I just ask the different one? There should be. Every... Well, I can only read what I've got here. I've got the auditor gender before. I have. Yeah, it is light and it is fast. I can't make anything up, but you'd perhaps be good enough to give us that information. As a former lecturer myself, if any member of... I ask the questions, you do the answers. As a former lecturer, every member of staff would be involved in moving forward to this merger. Did you give any other member of staff who was on a pay scale of 20,000 and 19 per cent pay rise or was it only to the person who worked for you in your office? The answer to your question is, I did not find the need to provide additional duties for other staff. And... They got 2 per cent. Well, the other thing you should know is that we are talking about an interim period of several months. It wasn't intended to be an established rise. For the simple fact that all of my staff or the vast overwhelming majority wanted jobs in the new organisation, the individual member of staff was very keen to be part of new college Lanarkshire. Under that context, if I may finish, under that context, that person, as with every other support manager, would have to apply for a post some five months down the line. Or, at that point, we thought shorter. So it was an intermeasure, it was an operational issue, there was an evidence trail there, there was a rationale for it and it was best value for money as opposed to bringing in, as is done across the piece. And you guys know that better than anyone, a consultant. We'll be the judge of that when we get the information. Well, I'm not sure what information I can give you. The voluntary service payments that you've paid out was £400,000 higher than what the Scottish funding council recommended. They recommended £1.3 million, you paid out £1.7 million. We've heard from the Scottish funding council that they could not apply any sanctions because if they recoup that £400,000, it would have a detrimental effect on staff and students and education in Lanarkshire. Now what we've heard from you today is that £400,000 would have had no detrimental impact on staff and students because you got it from commercial activity. So did the Scottish funding council know that the additional £400,000 that you had to hand out came from commercial activity? Because they might have been a bit more keen to apply the sanctions that they had the right to do. Why were they misled in thinking that this would be taken from students as opposed to it coming from commercial activity? I can answer that quite clearly. The money came from commercial activity and it's recorded, as Johnathan said earlier, in our annual reporting accounts for many years that we've done this on a regular basis or did it on a regular basis. Why the funding council concluded the way they did? I have no idea. It's a false conclusion, as far as I'm concerned. It's a false because they've actually, if you like, because I would be the last one to say that this money should have been taken from students and from front-line education in Lanarkshire. So I accepted the SFC saying they couldn't apply sanctions but, in actual fact, they could have because it would not have affected students because it came from commercial activity. Am I right? I can't share about this for 100,000 pounds. I don't know what is... It's the first paragraph with the Auditor General's report. I'll put your read it out to you. Please do. One point... Sorry, here we are. 33 staff left, a total cost of 1.7, of which the funding council contributed 1.3 and the college contributed 3.97945. Regretfully, I have to remind you again Paragraph 4. I have to remind you again that all of those severance arrangements for all of the staff happened well after John Gray and I left. We had no input into the severance arrangements or the college board at that time, up to 31st October, had no input. There was no structures available. There was nobody who had applied for VAS schemes. I think we've got plenty of other people coming to give us evidence today and the written submissions that we've had are contradictory to that. I'm sorry. I'm sorry. It's a matter of record that the volume 27s, all of the people who left, left after 31st October, there is absolute in some quarters complete confusion on this issue. John Gray and chairing the admitted office on the 24th, 25th of October, I left on the 31st of October. The decisions were made in January when you were opting in and opting out and opting back in again. The decisions weren't made on 1 November. You can't walk away and say nothing to do with me. They were made by the new college Lanarkshire management team about what was happening on the ground and the structures that new college Lanarkshire had developed. It was way after there were no volume 27s applications prior to the 31st of October. Just two fine questions, Mr Doyle, Mr Gray. Firstly, the bigot Bailey, can we just clarify in terms of the contract and the way he contracted them, where the facilitators are, did they provide specific HR advice? The way for facilitators and specific HR advice, as I've said. So in terms of the issues surrounding the provision of providing information from the Scottish Funding Council, which was referred to earlier, in terms of the guidance, are you placing the blame fairly squarely and is there a requirement that Paul Brown should have provided this information as I was saying? The Enumeration Committee minutes, which I understand is some concern with about being able to share, make it quite clear that in numerous occasions that Paul Brown and Bigot Bailey advised the Enumeration Committee on matters, all matters, opportunity to send. How is your concern laid a copy of the guidance? Yes. Yes. So you're very clear that Paul Brown acting on behalf of Bigot Bailey would have had a copy of that guidance. I mean, it's quite explicit in the minutes in the context of the advice. Yes, but there's actually context of advice where he's actually saying I'm going to provide this advice. You need to speak to Paul Brown. I wasn't at the meeting. But he was certainly aware of the concerns. Yes, he was aware of the advice. He was aware of that information. He was also aware of all of the evidence that he needed to support the board. Okay. Just one final question. A connection with the commercial activities that you referred to. Can we just make it clear when colleges go about their business and commercial activities, you are a paid official, you have public money that pays you. That's what allows their commercial activities to continue in the first place. It's not a completely separate enterprise that exists that's not part of the college, I take it. Is that clarity or not? I mean, how do these commercial activities operate that you refer to? Because they ought to operate under the autonomy of the college, I take it. You're absolutely quite correct. And under the charitable status as well that they have. They are absolutely part of the college. I hope that I've not given any other impression to that effect. No, but we're given the impression here that listen, everything's okay because we've got a bit of cash, it's there where the private company or whatever way we want to refer to it, so it doesn't really matter. I haven't said that. No, but Mr Gray said that. And you might want to explain that Mr Gray, the status of the private companies is that they come under the autonomy of the college and in many different ways are funded by public funds, these private autonomies that are there. So what's what reason do you think then that it doesn't really matter? Well, let's just get the decision to enhance that because it's not coming out of the public purse, but it is coming out of the public purse. As there are organisations that exist because the public purse funds them in the first place. Is that correct? I didn't say anything like that. You did say that. You said that I've got it on record. You said to me that it was acceptable because the funds have been put. You don't know why the funding council are concerned because you said the funds have been provided via the private enterprise that you're involved in. You might not want to explain how proud you are about it, so tell me. Does it not matter that both of those funds that have been provided whatever way you look at it are provided public funds and ensure that they're in place? Is that not the case? I don't see how you can conclude that money raised from commercial activities becomes suddenly public. Because it's part of the college. I mean, it's not Apple. You know, it's the college who have effectively created these organisations. It's part of the autonomy. It's still inadvertently. Whatever way we look at it, public funds are ensuring that they're in existence. Is that not correct? Okay, well, I mean, if that's the interpretation, I'm happy to live with your words on that. I mean, it doesn't get away from... Well, you should know better than me. You're the man who's been involved in the process. It doesn't get away from the fact that the funds had to be found from the college resources to make the payments and they did find the college resources. Okay, just very brief question from Stuart McMillan and then we'll conclude. Thank you very much, convener. It's just a point of clarification in terms of the commercial activity and the revenues that come in via that. Does that revenue go into a separate bank account via the college? So it goes into the one big bank account. It's there for the use of the college at all times. The use of the college. Right. Thank you very much. Okay, I think both panel witnesses for their session this morning and can I move the committee into private session, as agreed.