Latest news with #AlanSutherland
Times
16-05-2025
- Business
- Times
Officials failed to prevent misuse of public money at water regulator
Government officials failed to prevent an 'unacceptable use' of taxpayers' money at the nation's troubled water regulator, MSPs have found. A 'catalogue of failures' at the Water Industry Commission for Scotland (Wics) led to inappropriate spending, the report published on Friday concluded, including £200-a-head meals, gift cards for staff and a £77,000 Harvard business course for a senior manager. Alan Sutherland, the former chief executive of Wics, stepped down after the publication of a damning Audit Scotland report in December 2023. Its findings prompted further investigations into the quango, which uncovered more instances of spending outside public finance guidelines and Donald Macrae, the chairman, resigned in October last year. The body acts as the economic regulator for Scottish Water and is supposed to
The Herald Scotland
16-05-2025
- Business
- The Herald Scotland
What is WICS and why is it at the centre of a national scandal?
It highlighted "serious concerns" over failings in the Scottish Government's approach, with a complete failure by the Government to challenge the culture at WICS, which led to an "unacceptable use of public funds". What is WICS? The Water Industry Commission for Scotland (WICS) is the economic regulator of Scotland's water and sewerage services. Established in 2005, it operates as an executive non-departmental public body of the Scottish Government, based in Stirling. WICS oversees Scottish Water, the publicly owned utility serving over 2.5 million households and 150,000 businesses across Scotland. What is WICS's core role? WICS's primary function is to promote the interests of water and sewerage customers in Scotland by ensuring they receive high-quality services at a reasonable cost. Its responsibilities include determining price limits for Scottish Water to deliver ministers' objectives at the lowest reasonable overall cost and assessing Scottish Water's performance in areas such as customer service, investment, costs, and leakage. It also oversees the competitive retail market for non-household water and sewerage services. It supports the sector to achieve its long-term vision, challenging Scottish Water to attain best-in-class service levels, and becoming an international leader in economic regulation. How does WICS support Scotland's water sector? WICS plays a pivotal role in ensuring that Scottish Water operates efficiently and effectively, balancing the need for investment in infrastructure with the goal of keeping customer bills affordable. By setting price limits and monitoring performance, WICS ensures that Scottish Water meets the objectives set by the Scottish Government including improvements in water quality, environmental performance, and customer service. Why is WICS in the public spotlight? It has faced significant scrutiny due to revelations of financial mismanagement and governance failures. An Audit Scotland report highlighted inappropriate public spending, including: a £77,000 Harvard Business School course for a senior executive, lavish spending on meals, with some exceeding £200 per head and £100 gift vouchers for staff, surpassing the £75 limit for gifts. READ MORE: Scots watchdog using public funds to settle 1000s in unpaid staff tax The payouts also 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. The expenditure was deemed non-compliant with Scottish Government rules and did not represent value for money. What were the consequences of these revelations? It led to significant leadership changes. Alan Sutherland resigned as WICS chief executive on New Year's Eve 2023. He received a payment of £86,268, representing half a year's salary in lieu of a six-month notice period, along with additional payments covering legal fees and employer National Insurance contributions. Donald MacRae, the chairman of WICS, stepped down in October 2024 following criticism over the handling of the financial issues. Were there other issues within WICS beyond financial mismanagement? Yes, a workplace stress survey conducted in February 2024 revealed that nearly a third of WICS employees reported experiencing bullying at work. This pointed to a toxic work culture within the organisation, compounding the concerns raised by the financial mismanagement. How has WICS responded to these challenges? WICS has acknowledged past weaknesses in governance and financial controls. The organization has committed to implementing changes to improve its operations, including developing a 21-point improvement plan to address the issues identified in the audit. It said it would be undertaking cultural change efforts to improve the work environment and prevent bullying. Why has the Scottish Government been criticised? The scandal has dented trust in the Scottish Government's stewardship of public funds, especially given that WICS is a regulator meant to promote efficiency and value for money. A lack of oversight. Officials did not adequately challenge or question large expenditures, even though they were notified of them. This included the Harvard course and excessive hospitality bills. Critics say there were signs of mismanagement as early as 2020, yet the Scottish Government did not step in decisively to address them. WICS is the economic regulator of Scotland's water and sewerage civil servants in charge of "sponsoring" or supervising WICS were found by an internal audit to lack the rigour and curiosity necessary to spot and stop poor practices. Opposition parties have accused the Scottish Government of 'negligence,' 'mismanagement,' and even covering up failings. What is the current status of WICS? As of May 2025, WICS is undergoing a period of transformation to address the issues that have come to light. The organisation is working to implement the recommendations from the independent review and its own improvement plan. Leadership changes have been made, and efforts are underway to improve governance, financial controls, and workplace culture.
BBC News
16-05-2025
- Business
- BBC News
Lack of Scottish government of scrutiny over lavish spending at water regulator
The Scottish government failed to properly scrutinise lavish spending at a body charged with regulating Scottish Water, according to a new public audit committee said a lack of expenditure oversight at the Water Industry Commission for Scotland (Wics) was "simply unacceptable".A report by the auditor general detailed how public money was spent sending a senior manager on a course at Harvard Business School in the US, Mulberry sunglasses and business-class flights to New Zealand.A Scottish government spokesperson said steps had been taken to improve management at the commission, but acknowledged previous expenditure "was completely and utterly unacceptable". Convener Richard Leonard described some of the evidence heard by the Scottish Parliament committee as "simply extraordinary".He said the commission had "failed to live up to the standards required of a public body". Wics chief executive Alan Sutherland, and its chairman Donald MacRae stood down in the wake of reports by auditor general Stephen Boyle in 2023 and consultant Ernst & Young the following found a total of £77,350 was spent on Wics chief operating officer Michelle Ashford attending the Harvard course, which included return flights to completed MBA courses worth about £70, auditor general's report found that approval for the expenses was only sought afterwards, despite a Scottish government policy stating approval was required in advance for any expenses above £20, Sutherland also signed off on a business class flight from New Zealand - worth more than £18,159 - for the director of corporate and international affairs and her spouse. Mr Sutherland was also found to have submitted expenses claims for a £170 Mulberry wallet and £290 glasses which "had no clear business purpose".A further £2,600 went on providing every staff member with a £100 gift card for Christmas, while it was noted the commission had an "unusual" policy allowing staff to claim alcohol on meals cost a total of £2,699 - £996 of which was spent on Sutherland was given a £14,000 payment for annual leave he did not use and in December 2024 it emerged Wics spent a total of £105,000 on his departure from the organisation a year earlier. 'Unacceptable culture' Mr MacRae quit in October last year, months after a letter from net zero and energy secretary Mairi McAllan criticised the way in which Mr Sutherland's resignation was Richard Leonard said the Scottish government had been responsible for a lack of critical oversight of the commission's spending, which had allowed it to said: "Some of the evidence we have heard about the arrangements in place at Wics was simply extraordinary."That the body, charged with promoting long-term value from Scottish Water to its customers, itself failed to live up to the standards required of a public body left the committee with deep concerns."He added: "But the committee is clear that there also appears to have been a serious lack of oversight from the Scottish government."This failure from those who are meant to be safeguarding the public purse is simply unacceptable." The commission's role is to promote the interests of water and sewerage customers and ensure Scottish Water provides cost-effective services to ministerial committee's report acknowledged there had been widespread changes to the board and management since the auditor general's findings were it urged the current board to undergo refresher training on their roles and responsibilities to ensure that the failure of responsibilities does not happen said: "We have heard about significant changes within Wics and the organisation's commitment to improve the governance arrangements. These are clearly welcome. "But we want to see concrete evidence of these changes to ensure that the unacceptable culture that was in place has truly gone." A Scottish government spokesperson said it had taken steps to improve the management of the said a full response would be provided in due course."Ministers have been clear that the approach to expenditure at Wics up until December 2023 was completely and utterly unacceptable," they added."We have taken steps to improve our sponsorship function, completing all the management actions set out in the internal review of Wics sponsorship published last November."Wics interim chairman Ronnie Hinds said: "With direction from our board and through the commitment of our leadership team and staff, we have taken decisive action to strengthen governance, improve financial controls and embed a culture that is firmly focused on best value."Everyone at Wics continues to be fully focused on regaining trust and reaffirming our role as an economic regulator that upholds the highest standards, both in our regulatory approach and in our stewardship of public resources."
