'Collusion' over £849,842 Coatbridge College severance deals

Coatbridge College became part of New College Lanarkshire under the merger

Senior staff at the former Coatbridge College have been accused of colluding to give themselves overly generous severance payments before a merger.

Holyrood's Public Audit Committee heard how £849,842 was paid to seven staff.

Auditor General Caroline Gardner said she believed the chair of the board and the principal had worked together and withheld concerns over the payments.

SNP MSP Nigel Don said it was a "bad example of misuse of funds...and feathering one's own nest".

In June, the auditor general issued a highly-critical report of the severance deals paid out before the college become part of New College Lanarkshire last year.

'Exceeded terms'

New College Lanarkshire was formed by a merger of Motherwell, Cumbernauld and Coatbridge Colleges.

In her report, Ms Gardner stated that a total of 39 staff left from the former Coatbridge College at a cost of £1.7m.

Of this, £849,842 of this went on seven staff - former college principal John Doyle, a member of his staff and five senior managers.

Ms Gardner said in her report that the senior staff received payments "that exceeded the terms of the college's severance scheme".

The report was discussed by Holyrood's Public Audit Committee on Wednesday.

MSPs heard how the Scottish Funding Council (SFC) - which finances colleges - was powerless to stop the payments and its concerns appear to have been deliberately withheld from the committee that signed them off.

Despite outrage expressed by MSPs, the committee was told that the principal and officials involved cannot be prosecuted and the money cannot be recovered.

Ms Gardner told MSPs: "These are very serious failures of governance, amongst the most serious that I have seen in my time in this role.

"A case this egregious is unusual. What appears to have happened is the chair of the board and the principal worked together to achieve a certain outcome, with members of the remuneration committee not receiving the information they needed to make their decision, and not receiving the concerns that had been raised by the SFC."

Ms Gardner said that in her "professional judgement" this was "very unlikely to be an oversight".

'Deliberate withholding'

"It was a deliberate withholding of information, as far as I am able to draw a conclusion from the evidence that is there," she said.

"I understand New College Lanarkshire, when it took responsibility for the affairs of Coatbridge College, took legal advice on what action was possible to recover the funds and other action and were advised that that wasn't possible."

Ms Gardner said the SFC should monitor future remuneration packages closely.

"If that leaves a gap it would be worth exploring whether other remedies, including legal remedies, are needed," she said.

"I hope they wouldn't be. Most public servants don't behave like this most of the time, but occasionally a case like this comes along where the normal controls simply fail to have the effect intended.

"The new arrangements should mean that it couldn't happen, with the SFC now needing to approve severance packages before they are paid.

"I don't know whether it would be possible for that sort of collusion to prevent that control. I would like to be able to give the committee that assurance but I don't feel I can."

Fraser McKinlay, Audit Scotland's director of performance for audit and best value, told the committee: "One of the reasons this feels like it is in a whole different league in terms of the seriousness is that they had all of that information and traffic from the SFC saying, 'We have serious concerns about this and it would not be in line with good practice', and yet they still went ahead with it.

"At that point, when you have got some people intent on doing a particular thing, then every internal control in the world makes that quite difficult to stop.

"So we would never say to you this could never happen again."

Committee member Nigel Don said the case was a "particularly bad example of misuse of funds, deliberate withholding of information and of feathering one's own nest".

Following the committee hearing, Shona Struthers, chief executive of Colleges Scotland, said there were now tougher "sector-wide procedures and processes in place to effectively manage severance" payments.

"The SFC now also has the power to call to account any college which is non-compliant," she said.

"We are confident that these steps will provide greater accountability and ensure value for money for public finances."