Ministers are conducting a review ofScotland's water industry regulator following revelations of a 'colossal' training spend worth nearly half a million pounds over seven years including trips to Argentina and the USA.
Scottish Government sources say it has not received an appropriate or sufficient explanation from the Water Industry Commission for Scotland (WICS) about how value for money is met for the level of expenditure on staff training "at the expense of the public purse" when alternative, lower cost options are "clearly available".
It emerged this week that the financeregulator which is at the centre of a public spending row over lavishpublic spending includinga £77,000Harvard course,staff Christmas present perks and expenses issues, approved further past stafftraining costs which included trips to Argentina and the USA whichwere not formally approved by ministers.
Public spending watchdog Audit Scotland had been critical over failing to seek Scottish Government approval forspending in advance.
Net zero and energy secretary MàiriMcAllan said: “Ministers place the utmost importance on the proper spending of public money and these events are simply unacceptable. That is why I can confirm we have launched a full external review of WICS with an extended scope to look at all the circ*mstances around these issues.
"This will include the culture and ethos at WICS, the responsibility of WICS to proactively communicate with the Scottish Government and a specific review of the WICS training policy among other things to ensure the public can have every confidence that value for money is being secured."
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“The latest instances of training courses and trips only came to ministers’ attention in recent days. This, in itself, requires explanation given the considerable work put in train to restore propriety and trust in WICS following the Auditor General’s report....As a result, in addition to the external review, an internal audit review will now be launched into the Scottish Government sponsorship oversight and governance controls.”
Scottish Government sources had said there would be aninternal review into "our sponsorship of WICS" to ensure that progress is being made to implement the follow up reviews, action plan and learnings following the concerns raised by Audit Scotland.
The payouts included sending the head of external relations and strategy on a 13-day Transatlantic executive development programme course costing £20,404 in 2019 at Columbia University in New York. Travel and accommodation expenses amounted to £1,056.
There was an £84,620 spend for a head of retail on an executive Master of Business Administration [MBA] course over two years from September, 2018 which included time in London and a five-day assignment in Argentina with travel and accommodation costing £10,856.
A similar two year course for another senior manager from January, 2017, involving an assignment in Argentina cost £72,795 including £11,713 travel and accommodation expenses.
And some £87,769 was spent on 40 days of executive coaching for the senior management and executive team over five years at the Stirling office.
(Image: Columbia University/NQ)
It comes as ministers have been coming under increasing scrutiny themselves after admitting they gave retrospective approval over a controversial move by WICS that ignored Scotland when sending chief operating officer Michelle Ashford off on an £80,000 training trip to the US whichincluded two £5000 Transatlantic flights.
Ms Ashford's trip to Harvard Business School as part of a run of spending described as "unacceptable" by public spending watchdogs Audit Scotland.
It led to WICS chief executive Alan Sutherland, one of the highest paid public sector workers, being forced from his role with immediate effect in December.
The disgraced £182,500-a-year executive was given six months salary in lieu of notice which the watchdog says "he was legally due".
Audit Scotland said that it would not be investigating the latest revelations about training spend.
Ministers now say enhanced searches conducted by Scottish Government officials revealed that WICS had a policy of using MBAs and other management programmes as part of an overall approach to staff development and retention dating back to 2006.
They say this was not communicated to Ms McAllan until Saturday, June 8.
And it is said that Scottish Government officials were not made aware in advance of the specific costs of the training and were not asked to approve individual courses or the institutions attended.
Ms McAllan earlier said: “This information has come to my attention for the first time despite considerable work put in train to restore propriety and trust in WICS following the Auditor General’s report in December last year.
(Image: NQ)
"I have made abundantly clear to WICS my profound displeasure and frustration regarding the unacceptable costs involved, the lack of timely disclosure and failure to comply with due process.
“Ministers place the utmost importance on the proper spending of public money and I strenuously reiterate this.
“These costs incurred by WICS further demonstrate the issues highlighted in the Auditor General’s report issued in December last year.
“The Auditor General was clear in his concern that a significant amount of public money was spent without due process being followed or a clear assessment being undertaken to demonstrate value for money. The Scottish Government shares this concern and we insist on marked improvement.
“We had already been progressing a review of WICS governance in response to the Auditor General’s Report. I am clear that matters must now be escalated. In light of this further information, the scope of the review will be enhanced to include the culture and ethos at WICS, the responsibility of WICS to proactively communicate with the Scottish Government and a specific review of the WICS training policy among other things.
“Ministers are determined to ensure that all the Auditor General’s recommendations are implemented. The Scottish Government will continue to closely monitor WICS progress, including on their action plan in response to the report’s findings.”
Details seen by The Herald show that pasttraining costs amounted to £474,079 since 2016 with £150,318 spent in 2019/20 alone.
The spend dropped to £10,519 in 2023/24 the year after the spend on Ms Ashford's course the year before.
According to WICS, staff were "actively encouraged" to undertake the development opportunities and that it had successfully appointed staff into senior roles as a direct result of such training.
But it admitted that it needed to demonstrate value for money in each case "and accepts that this was not demonstrated sufficiently in the past".
A spokesperson for WICS said: “Considerable progress has been made to address the governance issues of the past, and we are fully committed to embedding meaningful change within the organisation."
