20 December 2023
By Bill Heaney
Auditors have found unacceptable use of public funds by senior officials at the Water Industry Commission for Scotland.
The Commission is the economic regulator of Scottish Water. Its job is to ensure long-term value and excellent levels of service for customers and communities.
Auditors reported that, in 2022/23, the Commission needed retrospective approval from the Scottish Government for around £80,000 of spending. This included:
- £77,350 for the chief operating officer to attend a training course at Harvard Business School
- £2,600 on £100 Christmas gift vouchers for each member of staff.
Expenses claims exceeding set rates were also found to have been submitted and approved without itemised receipts, including by the Chief Executive. One claim was for a dinner where the cost per head exceeded £200 per person. This, and other claims, included the purchase of alcohol.
Stephen Boyle, Auditor General for Scotland, said: “Value for money should always be central to public bodies’ spending decisions. But these findings highlight unacceptable behaviour by senior Commission officials in the use of public funds. I expect appropriate action to be taken to address the issues reported by the auditor.”
Dumbarton MSP and Scottish Labour Deputy Leader Jackie Baillie said “This astounding report lays bare a shocking culture of financial mismanagement and waste in the Water Industry Commission for Scotland.
“It beggars belief that this body has been frittering away public money with abandon as it hits Scots with one recommended water rate hike after another.
“I have raised the Water Industry Commissioner’s world-wide travel and accumulation of air miles before with the SNP Government, but it’s clear they haven’t bothered to stop this misuse of public money.
“It is essential that this frivolous spending is reined in and public finances are treated with respect.”
Scottish Liberal Democrat leader Alex Cole-Hamilton MSP was dismayed be the Auditor’s revelations.
He said: “Spending was uncovered on gift cards that breached tax and public finance rules, expensive dinners, and a £77,000 Harvard training course for one member of staff.
“This stinks to high heaven. It is jaw-dropping spending by a body that claims to be a ‘world-leading regulator’ of Scotland’s water and which is supposed to keep Scottish Water in check.
“The fact that it has been reported to Parliament shows the seriousness of this and why intervention is urgently needed.
“Sewage was dumped at least 14,000 times last year, blighting our rivers and beaches. In the face of that scandal we need watchdogs that are ready and able to raise standards at the government-owned water company.”
Water body chief resigns over £77k Harvard expenses row
BBC Scotland is reporting that the chief executive of the public body regulating Scottish Water has quit after it was accused of “poor governance” with public funds.
The Water Industry Commission for Scotland (WICS) spent more than £77,000 on a course for a senior executive at Harvard Business School in the US.
A further £2,600 was claimed to provide every staff member with a £100 gift card for Christmas.
Fat cat chief executive Alan Sutherland will leave his role with immediate effect.
The report by the Auditor General stated that the “financial management and governance issues found at the commission fall far short of what is expected of a public body”.
The Water Industry Commission for Scotland said: “We take the Auditor General’s findings seriously and will work with Audit Scotland and the Scottish government to address these.”
The Scottish government, which had approved the expenses retrospectively, said the failings were “completely unacceptable”.
A government spokesman added: “The Water Industry Commission for Scotland’s chief executive is stepping down with immediate effect and has tendered his resignation.
“WICS will now submit an action plan outlining how they will deliver on the Auditor General’s recommendations and we will play our part in ensuring that all of the recommendations are implemented without exception.”
Further findings in the audit showed that the cost per head claimed for a dinner, attended by Mr Sutherland, exceeded £200 per person – despite the approved non-city limit being set at £25.
It also noted an “unusual” policy where claiming alcohol on expenses was allowed.
A total of £77,350 was claimed for the Harvard Business School course attended by chief operating officer Michelle Ashford, which included flights to Boston.
Approval was also only sought afterwards for the expenses, despite Scottish government approval in advance being required for any service above £20,000.
Stephen Boyle, Auditor General for Scotland, said: “Value for money should always be central to public bodies’ spending decisions, but these findings highlight unacceptable behaviour by senior commission officials in the use of public funds.
“I expect appropriate action to be taken to address the issues reported by the auditor.”
‘Insufficient discussion’
The commission’s annual report for 2022/2023 previously stated that: “The Accountable Officer is taking action to address the weaknesses that led to the oversight of appropriate approval.”
The body employs 26 people and it has a statutory duty to promote the interests of Scottish Water’s customers.
It is funded via a levy on Scottish Water.
The report said that management had accepted the auditor’s findings and that there had been “insufficient discussion” of expenses.
It added that the commission intend to revise their expenses policy and provide further training for both management and staff.
‘Shocking culture’
Earlier this year it emerged that Mr Sutherland had been given a £14,000 payment for some annual leave he did not use.
Scottish Labour deputy leader Jackie Baillie said the report showed a “shocking culture of financial mismanagement”.
She added: “It beggars belief that this body has been frittering away public money with abandon as it hits Scots with one recommended water rate hike after another.”
Scottish Liberal Democrat leader Alex Cole-Hamilton called the figures “jaw-dropping”.
And Scottish Conservative net zero, energy and transport spokesman Douglas Lumsden said: “The staggering amount of public money poured down the drain by the Water Industry Commission for Scotland – a body set up to ensure value for customers – is indefensible.”
The Water Industry Commission for Scotland said it was dealing with the issues highlighted in the report “as a priority”.
A spokesperson said: “We are in the process of putting robust and thorough policies and procedures in place and will implement these in conjunction with Audit Scotland and the Scottish government.”
SCOTTISH WATER ACCUSED OF ‘HYPOCRISY’ AS 500 WORKERS SUPPORT STRIKE FOR NEW PAY DEAL
Unite confirmed that a consultative ballot indicated 92% of its members support strike action at Scottish Water
By Bill Heaney
When your boss is earning £300,000 a year plus lavish perks while you are sloshing around in sewage, stinking mud and carelessly discarded condoms and and tampon containers on the Clyde foreshore at Dumbarton for one tenth of that money then it’s little wonder that you would become disgruntled with the pay and conditions at your work.
And when the question of strike action comes up, you would be first in the queue to put your hand up.
From The Democrat in September ….
Scottish Water has been accused of “hypocrisy” by the Unite trade union, after some 500 frontline workers indicated their support for strike action.
Unite confirmed on Friday that a consultative ballot indicated 92% of its members support strike action at Scottish Water, on a turnout of 84%, while GMB union recorded 83% in favour from a 91% turnout.
Claire Greer, GMB Scotland organiser, said the ballot result was no surprise given the strength of feeling among staff.
It is in response to Scottish Water’s decision to issue a new pay structure, the unions said, and claimed the company is offering a below-inflation pay rise.
The unions’ next step will be to hold an industrial action ballot involving key frontline workers.
The Auditor General for Scotland’s report to the Scottish Parliament can be found here: Download
The Water Industry Commission for Scotland’s role, as set out here, includes ensuring that its assets such as sewers are better able to withstand future unexpected events, and challenging Scottish Water to improve its performance.