Ie sgrifodol i fy gwaith gleidraethau 32 yn siŵr iawn o'r blaid sydd o gael ar yr plwg gan領 yn Gwylfaenusiaeth Unedig, Gwylfaenusiaeth Unedig yn 2017. Maew rydw i eisiau i fod i'r gallu unrhyw o'rğimizu yna gyda ddaknodau rydym i gael i gwyfodaeth yr oeddent. Rydw i'r gwasanaeth yw fy nghymiddigau gyda Gwylfaenusiaeth Unedig, ac rydw i'r reslydd i adnod i gael i fynd i gael i gael i gael i'w gweithio gyda Gwylfaenusiaeth Unedig i mi haith. Gwyddonor iawn yw ein bod hyfforddau i ein g computers yw i'w ddigon ni yw'r unitein i ddweud y mae'r polisiad ynghylch, a fyddwn i chi byddwyd ar gyfer'i gredisiad,λλiann Gardiner arbuddau general agor Elf, Stephen Boyle, corffaith yma ymgyrch, Carol Grant, ynghylch ar gyfer fanshiraeth, ac Mark Roberts, ymffort ddweud ynghylch ar gyfer southwyr. Fyddwn i lawr i'w gwrandoio'r sefydliad o gwyddon. Fel gangoedd ganthaeth ystod o'r awddiadau, i'w ddigon ni'n dlegon ni'n digon ni'n Scottish Police Authority under section 22 of the Public Finance and Accountability Scotland Act 2000. I would like to draw the committee's attention to three issues arising from the audit and highlighted in my report. The first issue is the auditor's opinion on the SPA's annual report and accounts. This is the fourth section 22 report on the SPA that I have prepared for Parliament, and it is the first time that the auditor has not expressed a modified opinion on the SPA's accounts. This reflects improvements in financial management and financial leadership within both the SPA and Police Scotland. The second issue relates to financial sustainability. The SPA overspent its budget by £16.9 million in 2016-17, which was accommodated by underspends elsewhere across the Scottish Government's budget. The overspend would have been larger if the SPA had not received £13.6 million as part of the negotiated settlement that terminated the I6 programme. I have been recommending for several years that the SPA and Police Scotland should prepare a long-term financial strategy. It is encouraging that they have now done this, but this work confirms the scale of challenge that the two organisations face in achieving financial sustainability. The SPA does not anticipate achieving a balanced budget until 2020-21, and it expects to return to a deficit position after that. This financial context will make achieving the vision set out in policing 2026 very challenging. The third issue relates to both governance and transparency and value for money. The report sets out instances of unacceptably poor governance and poor use of public money relating to the appointment of temporary staff, the approval of relocation expenses for a Deputy Chief Constable, the decision to make the role of the chief executive of the Scottish Police Authority redundant during 2017-18. We will examine the detail of this decision during the next annual audit of the SPA. I welcome the progress that the SPA and Police Scotland have made in improving financial management and understanding their financial sustainability. However, the scale of the challenge facing the two organisations remains daunting in terms of the scale of the change required, the changes in leadership that are continuing at the moment, the integration of the British transport police functions into Police Scotland and the severe financial constraints that I have mentioned. Alongside me is Stephen Boyle, who is the appointed auditor for the SPA, together with Carol Grant and Mark Roberts, and together we are happy to answer the committee's questions. Thank you very much, Auditor General. I hear what you say about exploring the question of the chief executive's redundancy at a future audit, but given the significant public interest, I suspect that we want to explore some of that with you just now. Can I perhaps kick off by asking you to clarify paragraph 22 of your report by explaining exactly how the SPA unnecessarily incurred an extra three-month salary cost in respect of Mr Foley? Certainly, convener, and I'll ask Stephen to talk you through that in a moment. I just want to clarify my comment about the 2017-18 audit. The decision was made during the course of 2017-18. The payments will not appear in the accounts until the end of that financial year, which finishes in March 2018. We've included in our report because we recognise that it's a matter of significant interest to the committee and we'll do our best, but there'll be some bits of that that aren't yet closed off. Thank you, Auditor General. Good morning, convener. We set out a paragraph 22 of the report, and elsewhere in the report, the decision-making process that the SPA went through in terms of the ultimate early retirement and the associated payments for the now former chief executive. Stepping back, if I may, a few months, the decision point that the SPA took was in respect of Her Majesty's Inspector of Constability's report into the forensic services within the SPA and the critical report and the recommendations that came. At that stage, the SPA board decided to act upon that report and, principally, sought to amend the reporting line for the director of forensic services, rather than to the chief executive, instead changed that to the board. As a consequence of that, the board took the view that the scale and size of the chief executive's role was reduced, and in their mind that led to a redundancy discussion. The SPA board considered an options paper a closed meeting on 7 June. That was the point where they sought to recognise the change in reporting lines and the change of the role. They also, at that stage, sought to engage in a consultation process with Mr Foley. The judgment that we have made in the resulting decisions around a convener are twofold. One is that, in the exchange of correspondence that led to the decision making, that was not held at a formal board meeting. We felt that a decision of such magnitude would have been better served to have been held to reflect good governance standards to take place in a formal board meeting. The second point in respect of we concluded paragraph 22 that is incurred an additional three-month salary unnecessarily. A judgment on that point is based on the fact that the SPA took the decision to pay Mr Foley's notice in full six months of that. What we have not seen is any evidence or any reflection of a discussion around whether or not they could have reasonably asked Mr Foley to work his notice period. The SPA board was very clear that the SPA felt that it was very important to retain the services of an accountable officer and to retain access to Mr Foley's knowledge of the organisation in respect of the accounting arrangements, and that it felt that that led to ambiguity about his potential leave date from the organisation. In our judgment, we reflected on the previous history of the organisation, that in every year of its operation, and that some of its difficulties in concluding year-end financial reporting matters are well known to the committee, but they have always met the year-end statutory deadline of laying its accounts before Parliament by the end of December. In our view, that decision making process was not evidence as to whether or not they could have sought to conclude Mr Foley's employment with the organisation but allowed him to work his notice period. We thought that there was some merit to that in gaining access for his interim successor to have some form of handover arrangement. That led us to the judgment that we set out in the report, convener, that essentially, in Mr Foley's leaving organisation on 30 November 2017, had he worked his notice period, that would have taken him up to February at the point where the board reached a conclusion for Mr Foley to leave the organisation in August. Instead, six months forward from November takes us into May, and that is where we arrive at the difference of the unnecessary three-month additional salary costs. That is a very helpful explanation, but in doing so, it invites quite a number of other questions. Let me try and unpack some of this before moving on to some of my colleagues. There are two separate issues here. One is the decision that is made in respect of Mr Foley's package, and the other is some of the questionable financial decisions made, I believe, by Mr Foley himself. Am I correct in saying that Mr Foley was the accountable officer? Some of the questionable financial decisions that you unpack in your report about paying for people's tax bills, et cetera, would have been taken by him? They were, and the report is clear about the personal decision making and the fact that the accountable officer takes responsibility for those in any case. Okay, none of them were reported to the board? Certainly the payment of relocation expenses wasn't, and we say that in the report. I think the others weren't, but I'll just ask Stephen and Carol to confirm that. Yeah, and we're going to take any evidence that the other examples were reported to the board. Okay, so we can safely assume that Mr Foley took those decisions or was aware of them. Thank you, that's helpful. In the case of his own package, I'm interested in who actually took the decision then, because if it wasn't in front of the full board, Mr Foley himself was the accountable officer, so it'd be inappropriate for him to take that decision, who took the decisions behind closed doors? The decisions were taken by the SPA board. What we are clear on, convener, is that that decision was taken by correspondence. The decision making around that point was initiated at a closed board meeting, so there was a board meeting held, but in what we've seen from the papers for that meeting, that was more about the change in the role and the change in reporting lines as a result of the HMICS forensics report. Once the boards were clear that they wanted to proceed with a change of accountable officer arrangements in chief executive role, that led to a series of email exchanges with the chair and vice chair, and that was followed up once they'd settled on the fact that they were going to proceed with a change in role, that the decision making around the Mr Foley's financial arrangements to leave the organisation were also taken by correspondence. So this never went for a final decision before the full board. What you're telling me, if I've picked you up correctly, is that this was a series of emails between the chair and the vice chair. Apologies, convener, just to clarify, not just the vice chair from the chair and all the board members, so all the board members were invited to express their views. Given that we touched on the decision that was taken over the summer months when many of board members and others would have been on holiday, our judgment was that none the less a decision of this importance merited a full board meeting. In all your experiences in auditor, have you ever seen anything like this before, where decisions of this magnitude and sensitivity are done by email? No, convener, I haven't. I think that we would have expected a full board meeting to consider such a... I just... Can I work very briefly, convener? I think that, as well as the question of there being a full board meeting with which I fully agree with Stephen, the other point that he makes in his annual audit report and I make in the section 22 report is part of the purpose of that meeting, would have been to consider all of the options available to the board, rather than simply the proposal that was finally agreed. We haven't seen evidence that that occurred. Okay, that's interesting. Given that it's clearly sensitive in our next session, we're going to come on to consider severance and settlement agreements. I'm curious to know that, with something of this sensitivity, is it not normal practice that it would be reported to at least the sponsoring department? So I'm curious to know, was the Scottish Government... Did you find evidence of the Scottish Government being consulted? Or advised in any way of this whole process? Yes, we did. We have seen email exchanges from the vice-chair to the Justice Department, advising them of the progress. What we're not clear is that we've seen all of the email trail and I think that's something that we will follow up on. Nonetheless, we have seen evidence of the Scottish Government being consulted and made aware of the decisions that the SPA board was taking. I'm curious to know whether that information is in the public domain. When you say that the Justice Department is a big department, who was the email to? Was it the director general of the department? In terms of that, I'm not sure if that information is in the public domain, and if I can spread a bit more clarity, I think that we'd say it's to senior civil servants in the policing division. I don't know whether it's possible to have access to those emails. I think that the committee would certainly be very interested in the source of the information that you've received, because I think that's central to exploring what actually happened in terms of decision making. Can I move on and ask you—I suppose that the committee, and you'll be aware of this, committee have had a number of section 22 reports from different organisations, and when we come to question those responsible, they've either received settlement packages, they've taken early retirement, as is very much the case with the Scottish Police Authority. The committee has concluded that we don't want to see public bodies reward staff for failing. Given that that's the committee's view, and given that you yourself identify the poor governance and the poor use of public funds, do you believe that Mr Foley should pay any of his settlement back? The first thing to say, convener, is that I entirely understand the committee's concern about this. Those are significant amounts of public money, and I say in my report that the governance failings are unacceptable. To answer your specific question, it's hard for us to give you a clear answer about that, having not seen the options that the SPA board considered. We know what they finally agreed, we don't know if they considered alternatives, and without having that information available to us, I don't feel able to express a view at this point. It is something that the committee may want to follow up with the SPA and with Government. Let me put this a different way. Paragraph 22 suggests to me that at least three months' salary could have been saved. Never mind how the actual settlement was calculated, but that three months is an overpayment. I have no doubt that the Scottish Police Authority board could have structured the agreement with Mr Foley in a way that avoided payment in lieu of notice that wasn't worked. That's very clear. The question is whether there are other options available to them that may have saved money for the public purse and fulfilled the governance concerns that you are alluding to is a different question as well. Thank you very much. Let me let other members in. Colin Beattie. Let me start on a positive note. You have stated in the report that there has been significant improvements in some aspects of the SPA governance. Would you like to highlight and expand on that? Yes. My specific comments in opening this morning were about the improvements that we have seen in financial management and financial leadership, which have been at the core of the concerns in the previous section 22 reports over the past three years. I'll ask Stephen and Carol if they can give you a flavour of the improvements that they've seen, which meant that they didn't need to modify the auditor's opinion on the accounts this year. Last year's independent auditor's report on the annual report on accounts had an emphasis on matter that drew attention to weaknesses in the non-current assets, particularly the quality of records and associated explanations. We have seen a big improvement during this year's audit. A consequence of that has been some investment in key skills in that area. Record keeping has improved. Carol and my colleagues have received the explanations that we requested for all of our inquiries. We think that the quality of the finance team has also improved. We have seen the kind of engagement that we have seen over the course of the year. That led us to a point that, notwithstanding some of the issues that we do report through the annual audit report, is that we were able to express unmodified opinions across all of the opinions that we were required to provide. I would like to turn to specific issues around relocation expenses and so on, which have been highlighted in the report. One DCC received a payment of £18,000, which seems to have covered travel expenses and temporary accommodation. In your report, you say that it came under relocation expenses, but presumably that is a correct place to put it. The total payment was the £18,000 payment that was made in 2014-15 for travel expenses from the base from which the officer was moving and rental expenses on a temporary basis. The additional payment in 2016-17 was for the sale and purchase of a permanent residence plus tax liability on it, so that they were all within the umbrella of relocation expenses under the policy for senior officers. The £53,000 was a tax liability on the officer's relocation expenses. I am confused here because I have been through this in the private sector and the tax has never appeared, but could we elaborate a little bit on that? Certainly. The Police Scotland regulations for senior officers entitle officers who relocate to take up a post to claim reasonable expenses for relocation. That is not defined and it is not capped, which the SPA has since recognised as being a problem and as open negotiations with the police. I think that it is not normal. In most organisations, there is a cap and it is generally around the level of £8,000, so significantly lower than the figures that we are seeing here. £8,000 is the level at which HMRC accepts that the benefit is non-taxable. Above that, it is taxable. Again, the policies in place at the time provided that the SPA would cover the officer's tax liability on the relocation expenses that were incurred. Is that a long-standing policy? It is a long-standing policy and I will ask Stephen and Carol to talk you through the detail of that if that would be appropriate. The police regulations and the one in the case that you are referring to were the Strathclyde policy that was used because the SPA and Police Scotland did not have a policy at that point, and it had been in place for a number of years. Why did you pick the Strathclyde one? Was it more generous than the others? I honestly do not know the justification behind the selection of the specific policy. It was deemed to be appropriate to be used at the time. The Strathclyde policy in this specific example, we think, was lightly used because, as Carol says, the SPA did not have a policy and at the point that the officer joined in late in 2012 was at the point that the SPA was forming and using its policy arrangements. We are seeing that the Strathclyde policy, as we mentioned, did not have a cap on it, but it contained some other provisions about a timeline. That is one of the key points that we make in the report. That policy has a reference to an 18-month time limit. In our judgment, as we look to capturing the report, given that the timeline from the appointment through to payments being made as recently as 2017 exceeded that 18-month limit, we make the judgment that it would have been better to have had some governance around some of the decision-making that accompanied that. I see the reason that they have given here for the claim exceeding the 18-months. Does that mean that the expense was incurred all that time ago? The officer was out of pocket during that period? The officer moved home at the start of 2017. The sale of the house went through in January and the purse of the house shortly after. There was not a time limit in terms of the payment of the amounts. Looking at those payments, when there was 18,000, which is basically travel and accommodation, temporary accommodation, the relocation expense is 49,000, what did that comprise? That seems an awful lot of relocation expenses. I will take it down a bit for you if that would be helpful. Under 15,000 of that is related to the sale of the property down in England, and 34,000 of that is related to the purchase. The largest element of that was the land-based transaction tax, which is about £30,000. That was all paid for. I would not mind the job and the police service. It is very generous. You have stated here that relocation payments of this magnitude do not represent a good use of public money. Do you want to elaborate on that? I am not sure that there is much more to say, Mr Beattie. In many public bodies, there is provision for relocation expenses to recruit the best candidate for a job, and that is appropriate. There is generally a cap on the amount that is available, and that usually matches HMRC's cap for taxable benefits coming into play. £120,000 is a very significant amount of public money. As Stephen has said, in terms of the timing, the transactions took place a long time after the officer had taken up post, although the then chief executive felt that it was within his authority to authorise them. Stephen feels as the auditor and I feel as the auditor general that that was at least questionable and should have been put to the board for decision. The officer's payments, nothing went to the board on it, despite the size of the pay-outs. It was authorised by the then chief executive. Would you consider that, at that period, it was handled in a regular manner? As I said, the policy did not contain a cap and there was not a definition of reasonable expenses within it, so it is not possible on those grounds to say that the make-up of the payment was wrong. However, the policy that was being applied included an 18-month time limit that was exceeded by some margin. Given that and the amount of money involved, it seemed to me to have been appropriate to have gone to the board for authorisation for that, that did not happen. Given that it did not, and there seems to be a history of this, did the chief executive have the authority to approve it within his delegated powers? He believed that he did. I think that the scale of the payment and the fact that the timescales applied were outside the limits of the policy is at best questionable. That is why I brought it to the attention of the committee in this report and why Stephen raised it in his annual audit report to the authority. It is very clear that none of this went to the board prior to the payments and so on being approved. Was there any subsequent reference to the board? Stephen, you will want to talk through that. There have been board discussions and SPA audit committee discussions about the payments, but from what we have seen those have been generated by our own annual audit reporting. At the SPA audit committee, the discussion that they had on the matter, I think that they recognise that there is some scope to tighten up the arrangements that they have in this regard, and we welcome that process. We have not seen any evidence that there has been a discussion yet to either the SPA board or more directly their people committee, which would feel like the best place. I imagine that is where they intend to take their revised arrangements to in 2018. The 2016-17 relocation payment was processed as a BAX payment, rather than through the payroll system, and it was incorrectly coded as childcare vouchers. Obviously, there was a tax implication there. Was all the tax paid by the SPA? The tax was eventually paid, but as you say, it was miscoded originally and paid through the BAX system rather than through payroll. Again, Stephen and Carol can talk you through the detail of what they found. That cost was met by the SPA. When we drew their attention to the relocation payments that we recognised, they then built it into the return that they were doing in relation to the tax and national insurance, and it was built into the calculations. Just to clarify, it was, or at Scotland, that found the error. It hadn't been included in the tax and national insurance calculations until we drew it to their attention. How much? I don't know if it's included in the tax figure here, or if it's an additional tax payment that's not evident. It is the figure of £53,000 that's included in that. It's included in that. That is the figure. Was there any penalties or so on? No, there has been no penalties. There was no penalties. Obviously, it's a concern that these errors take place. You say that the Mr Fuller and Chief Financial Officer made insufficient efforts to ensure that the remuneration report and the annual report and accounts were free from error and omission. Could you maybe expand a little bit on that? The committee would recall that my predecessor drew attention to the fact that the compliance with the financial reporting manual had been an issue for the SPA and that triggered some of the reporting that was brought to you previously about the need to improve financial leadership within the organisation. As we've commented in the report that we think that that has happened, one of the key points in the year is for an audit committee to receive the unaudited annual report and accounts before it is presented to the external auditors for us to commence our detailed testing on the accounts before the conclusion of the audit process. At that meeting, both the County Police and the Chief Financial Officer expressed to their committee that they had gone through the annual reporting accounts and were content that they were complete and represented a significant improvement from previous years. That, we subsequently discovered that they had been familiar with those transactions and that those transactions would very clearly have to feature in the remuneration reports within the annual reporting accounts led us to the judgment that insufficient efforts had been made to ensure that the annual reporting accounts were free from any error or omission. I want to pick up on the same issue, although Colin Beattie has covered quite a lot of it. I'm struggling to understand the point about the staff-clied policies, because from your report, it looks like the Scottish Police Authority had no policy in place that covered or would have allowed those payments and expenses to be met. Was it legitimate to refer back to the staff-clied policies, given that the staff-clied authority no longer exists? I think that this is primarily a matter of timing, but the Scottish Police Authority came into being on 1 April 2013. The Deputy Chief Constable took up post at the end of 2012, so at that point there was no SPA to have policies. The offer of appointment included a standard provision saying that reasonable expenses for relocation would be available. Mark, do you want to talk through the way in which the different regulations interact with each other? Thank you. The overarching piece of legislation is the Police Service of Scotland Regulation 2013, which sets out the terms and conditions in a general sense for senior police officers. Beneath that, there are standard operating procedures. In this case, that was the old staff-clied police authority's operating procedures that took place. When the Deputy Chief Constable was appointed, those were the procedures that were in operation. It would have made sense for one of those standard operating procedures to be used as the SPA could not, in any sensible way, have existed and had its own procedures at that point. What is the status of the staff-clied policies now? Can they be picked off the shelf and applied to other situations? Now that the SPA has been in existence for a number of years, it now has its own policies in place, both for senior officers and for civilian staff, which are what it works to now. As the Auditor General says, the SPA is now looking at revising its own policies as regards senior officers' relocation expenses in the light of what we have reported in this audit. I appreciate the timing issue in terms of DCCFAS Patrick's appointment. Would the SPA have been in breach of contract if it had not met those expenses? I think that there are two elements to that. One, the policy is clear that reasonable relocation expenses would be reimbursed. There was not either a cap on that or a definition of what reasonable would include. That seems to me quite a loose policy, although it is commonly applied to senior officers in the police service. As Marcus said, the SPA has said that it will revisit that and will look to renegotiate it with the police negotiating board. The second issue is the timescale. The Strathclyde standard operating procedure that was used had this 18-month time limit in it. That time limit was disregarded by the then accountable officer on grounds that we do not think are strong enough to justify making a payment of this scale outside the time that the policy lays down. The relocation expenses add up to £67,000. Is that correct? Plus the tax liability of £53,000. Is that considered to be reasonable? As I said in response to an earlier question from Colin Beattie, many public bodies have a policy that allows the repayment of relocation expenses. Most of them have a cap generally about £8,000. That is the same level at which HMRC starts to regard that as a taxable benefit. 120,000 feels like a large sum of public money in that context. Given the cap that applies elsewhere, is this the first time that you have seen a payment of this scale? Is it exceptional? It is exceptional. I think that Stevenson said earlier in response to an earlier question that he has not seen one of this size with the caveat that the same policy applies to senior police officers across the UK, but certainly has done in Scotland elsewhere. Stevenson, do you want to add anything to that? As the Auditor General suggests, from our preparation and research, there are examples on all the parts of the UK where there have been significant relocation payments made for senior officers. Outside of a police setting, I have not seen anything of the scale. I think that many people will be quite shocked that the former chief executive made this decision in isolation at the stroke of a pen, signed off these very large experiences. Columbia Tate asked about the involvement of the board in looking back at this decision. Is the board concerned about the delegated powers that are afforded to the chief executive? What other powers does the chief executive have that we perhaps do not know about? That is a question that you would need to ask of the board. We know that they are committed to reviewing this particular policy. The question about what view they have taken of the actions of the chief executive is one that you would need to explore with them. In some ways, I think that it fits with the previous questions from the convener about the options that they considered in agreeing his early retirement. OK, before I bring in Liam Kerr, I just ask that, given that the accountable officer we have heard evidence today has clearly demonstrated poor financial judgment in signing off some of these packages, I am conscious your report is for 2016-17. Did he exercise that poor financial judgment before that? This is the first time that the Audit has identified issues of this scale. We have, as you know, seen different examples of poor governance around the way that board meetings were being held and so on in previous reports, but payments of this type have not come through in the Audit work. I need to give you the caveat that an Audit is not designed to uncover every possible element of bad decision making that may take place. It is a risk-based approach that uses professional concepts of materiality to give assurance in specific terms. I cannot give you an absolute confirmation that it has not happened, but it has not been identified through previous years' Audit work. Given what we know about this year's or the Audit work for 2016-17 and given the clear risk of previous behaviour, will you now go back and look? I would expect that the SPA should be doing that on the basis of the Audit report that they have received from Stephen and his team this year. I think that, as part of the 2017-18 Audit, that will be part of what Stephen and the team are looking for. That is helpful to know. Up to now, the SPA has not really been proactive. They have only reacted to your reports coming forward to address any of that. I would be very keen that they look back, given his behaviour as the accountable officer in 2016-17. I would like to clear up at the start. Throughout the process, there is talk interchangeably of redundancy and early retirement, but those are two very different animals. Can someone explain to me why we use those terms interchangeably? They should not be used interchangeably. They are, as you say, very different things. Our understanding at the broad level is that, in the former chief executives case, there were two elements to the agreement reached between him and the SPA. One was departure under the terms of the normal early retirement scheme in the SPA, which entitled him to a sum of money that has been reported by the SPA but not yet audited by us, plus a cost for the strain on the pension fund. Separately to that, a payment for six months in lieu of notice was triggered when he left at the end of November this year. With the caveat that we have not audited those figures yet, those are the two elements that we understand made up the agreement. So which is it? What is the reason for the ending of his employment? Because redundancy is something that is done to him, early retirement is something that is done by him. Stephen, do you want to pick up the detail of that? I think that I referenced back to the earlier answer about the decision that the board took to change the status of Mr Foley's role. It came to a view that, in light of the forensic services no longer being part of his remit, that represented a significant diminution in responsibilities and that led to a change in circumstances. It is very clear that, in the consultation that they went through with Mr Foley and that his subsequent departure was in the context of an existing approved early retirement scheme. That is what part of his financial departure costs are in respect of. Added on top of that is the decision that Mr Foley took to leave the organisation at a fixed date, rather than working on his six-month notice period, which resulted in the six-month payment in lieu of notice. I am not quite understanding, because if they start from a position that says that this role is redundant and that, on the best case, we will give them that, that there is a diminution in responsibility, therefore there is a redundancy situation, therefore at some point his role will change and that post is redundant and there will be payments associated with that. It sounds as though what has happened is that, at some point, a discussion has taken place that says, if we change the reason for dismissal to early retirement, then we can manipulate the payments. Is that a fair statement? I am not sure that I would recognise all of that. I think that what we would look to do is to clarify whether, by virtue of Mr Foley's membership of whichever pension scheme, I assume, it is the local government pension scheme by virtue of him being a civilian member. In addition to Mr Foley's age, the circumstances that led to his departure would have allowed him to gain access to his pension arrangements. In terms of the specifics as to the distinction between redundancy and early retirement, I may need to come back to the committee in writing on that. I would like you to do that, if you would not mind, because it seems to me quite an important distinction. Has the SPI explained why it took—he talked earlier about the decision being taken by correspondence amongst the board. Has there been any explanation as to why it was done by correspondence and would that be a usual process? The explanation provided to us was that the SPI was keen to expedite the process and that, as the receipt of the HMICS report came in in June, and they had no board meetings planned for that period over the summer months, that they felt it appropriate to proceed and to provide organisational clarity, and on that basis came to a judgment, not one that we think is appropriate, that they were able to take that decision by correspondence led by the chair and the vice chair amongst all of the board members. Has there been any indication as to why they were keen to expedite the process? In terms of the discussions that we have had with the vice chair of the SPI who led the process on behalf of the board, they were keen to provide organisational clarity, which is the phrase that they have used. The two options that they chose to do that one was to use an accelerated process with the consent of Mr Foley, which allowed them to complete the process in their judgment by August, rather than engaging in a 12 to 14 and a half week consultation period as they set out as typical and as the right of any affected employee, which would have gone for a much longer period. That led them to the second element of what was driver behind that was the clarity and value for money. The payment that is made, leaving aside the payment in lieu of notice, is £43,470 a payment for early retirement that is called in the report. Do you have any idea how that is broken down? What elements form that? Apologies, Mr Sker. We do not have that detail and I expect that that is the work that we intend to focus in terms of the reporting in 1718. I understand. When you were doing your report, given that, if I may just do a very short summary, given that we apparently have an individual whose process is being expedited to get him out of the organisation for whatever reason, but this individual you have discovered appears to have breached the procurement rules for the financial position, has approved expenses out of policy and out of date, appears to have paid personal tax but, for whatever reason, has failed to log it properly. Is there any evidence that the board or indeed anyone else looked at this and said, why aren't we running a performance management process here? I, in coming towards the conclusion of the audit, I made inquiries of the vice chair whether there were any other avenues that the SPA board would be able to take in respect of those matters, drawing to her attention what we were applying to report to the SPA in the context of the annual audit report and those matters that you referred to. She was clear that there were no other alternatives and no other avenues that they were able to pursue other than the one that they did. There were no other avenues that they were able to pursue. What do you mean by that? There are always other avenues that one can pursue. In their judgment, there was no evidence or records that would support an alternative approach. Forgive me. I suggested that there was an awful lot of evidence that suggested that another option might have been considered by the board. Is it that the board weren't aware of any of that or took a decision that it wasn't actionable? I'm not sure that I recited all of the internal decision making within the board. I referenced the conversation that I had with the vice chair in terms of what we were intending to report in our annual audit report and whether that would cause them to pause and consider alternatives. She was clear that there weren't. And one final question, just for the avoidance of doubt, when this process was going on, when the package was being built for early retirement, the Scottish Government were fully appraised of this and were aware of it and allowed it to go through without pulling it back. Is that correct? So, as I said in response to an earlier question, we were in receipt of some correspondence between the SPA and the Scottish Government that, from the SPA's perspective, alerts the Government to the progress that it is making with the process of Mr Paul's departure. Which suggests that the Scottish Government was appraised of what was going on? Yes. Okay. Can I move to Willie Coffey? Thanks very much, convener. Good morning, other general. I'd like to shift the focus slightly to one element of your report on ICT and the policing 2026 strategy. You mentioned in paragraph 20 that you quoted the Scotland grief report from just September this year, saying that, in their opinion, conditions do not yet exist within Police Scotland to provide a satisfactory level of comfort that is sufficient to acknowledge delivery capabilities in place to support the delivery of policing 2026. Can you give us a bit more background on where you see the ICT strategy in Police Scotland? As the committee knows from its previous work, the policing 2026 vision is heavily reliant on ICT to transform the way that policing is carried out, and we have therefore tried to keep a close eye on progress. Mark, do you want to pick up where we are with that just now? So, the current intention is to be at the standard is that a new ICT strategy will be brought to the SPA in March next year. Police Scotland have brought in external support in order to complement the existing ICT function in developing that. We see that as very much a critical step in implementing and realising the vision in 2026, but that strategy is only the first step in implementing it and making it real and meaningful is the critical next step. That will require a significant amount of investment and a significant amount of additional resourcing in terms of the capacity of that function. The next key milestone will be the presentation of that strategy in March next year. I6 was not a particularly pleasant experience for anybody. What assurance do you have, if any, that we have the capability skills at the top of the organisation to deliver a sound new ICT strategy and deliver that in the future? Over the past years, there has been investment at a senior level in terms of bringing in experience from outside in terms of major change programmes. The lessons have very much been learned in terms of, rather than trying to do one major ICT programme that encompasses 80 per cent of policing activity, it is much more of a modular activity. We have seen over the last year the roll-out of a national custody system as a discrete part of that. I think that there is progress in doing that. The evidence that we have of bringing in external support to help with the development and implementation of the strategy is also encouraging. Have you made any recommendations specifically in the report? Will you be coming back? We will see the strategy presumably next year, but will you be having a look at that, particularly because of the experience that we had with I6? One element of the annual audit process will be to look at ICT. In part of the reports that Stephen will make to the SPA next year, there will be a component that will discuss the kind of progress in ICT. Can I pursue the question of Mr Foley for one minute before I bring in Alex Neil? You talked about the options being considered in the 7th of June. Was there a paper that was considered verbally? Do you have access to that paper? Yes, convener. This was a table presentation that was made to the SPA board on that day. Could one of the options, just listening to the evidence here that I'm assuming the board would have been aware of to some degree, was one of the options considered to dismiss John Foley on the grounds of incompetence? No, I don't think that it was. Interesting. Alex Neil. Can I just clarify the timeline in all of this? Am I right in saying that the first decision was a decision by the SPA board effectively to downgrade the job of chief executive because it no longer carried the additional responsibility for forensics? Is that right? Having taken that decision, they then entered discussion with John Foley about his departure. Yes. Before I go into the John Foley thing, because I have a couple of questions on that, obviously Mr Foley has been replaced by Kenneth Hogg. I don't know what his job title is. If I remember correctly, Mr Neil, I think it's interim chief officer. Right. Okay. Now, what salary was Mr Foley on? I'll tell you exactly. It's reported in the annual report on accounts. It's on a salary of between £115,000 and £120,000. According to the press, Mr Hogg is in £120,000. Is that being paid for by the SPA or the Scottish Government? That would be made by the SPA. So, where is the logic in having a chief executive whose position is downgraded is on £120,000, is then going to be replaced presumably by somebody with far less responsibility and you would therefore think, far less remuneration, to be replaced by someone else on £120,000? I think that in terms of the specifics and the payment arrangements that something will turn our attention to in the 2017-18 year and come back to the reporting of it at that stage. It was highly illogical to me. Why would you expect to see a series of options being considered by the SPA board? My second question is just to get the timeline right on this decision about retirement redundancy or whatever. Presumably, the first option was retirement and presumably a date then was agreed with Mr Foley about his retirement. Mr Foley's leave date from the organisation was ambiguous because the board was keen to retain Mr Foley's services through to the conclusion of the audit of the annual reporting accounts. It was provisionally scheduled on the expectation that the audit and the annual reporting accounts would be laid before Parliament by the end of October. Subsequently, due to the complexity of some of the issues that are before you today, the audit was eventually completed at the end of November. Given that the annual reporting accounts had always been laid before the statutory deadline of the end of December, we felt that the decision to pay Mr Foley's notice period in full was not a robust judgment to make. So, was it paid for both retirement and payment in lieu? Bons, can you repeat the question? It was paid both for his retirement lump sum and, on top of that, payment in lieu. The payment in lieu of notice period was triggered in full and was agreed that that would be enacted on the actual date that Mr Foley left the organisation. That payment will happen with effect from 30 November, and, as I understand, it will be paid this month. When did he physically leave the organisation? He physically left on 30 November. So, he is getting six months in lieu after his retirement? That is exactly the judgment that we make in the report. We have not seen any evidence that the decision around Mr Foley physically working his notice period, referencing back to the decision that was made formally made by the board in August at that stage, if the timeline had started then, rather than it starting with effect from the end of November. Two other very quick questions. The first one is on other decisions referred to that Mr Foley appears to have taken in relation to the deputy chief constable in other matters. He has taken those under delegated powers, and that is a contentious issue. Did he consult the chair or the vice chair or the chair of audit before making any of those decisions? We are not clear that he has consulted the chair of the audit committee or the vice chair. There are some, in respect of the relocation payments, Mr Foley has advised that he did consult the chair, both the now former chair and the previous chair before that, given the length of time that took place. Regardless of that consultation, if it is still our view that that would have been better served by taking place within either a formal committee environment or the full board itself. I ask you, because obviously the concentration has been on the chair and the chief executive, but this is quite a big board. I think I am right in saying that there were about a dozen or 14 members of the board at the time all this was happening. Has any non-executive director actually complained about the governance arrangements and about having major decisions made by correspondence instead of atty board meeting? We have not seen any evidence of complaints of that effect. It doesn't surprise me, unfortunately. I think that the non-executive directors and their role needs to be called into question as well. They have sat and allowed all this to happen and not done their job. Did the Scottish Government at any point raise concerns about the governance and the way in which those decisions were being reached? Not to my knowledge, but that might be a question for the SPA and the Government. I have two supplementaries. First, Liam Kerr, then Monica Lennon and then Bill Bowman have been waiting patiently. How often is the chief executive position in a public company redundant? It is unusual for very obvious reasons that public bodies require a chief executive that person is usually the accountable officer. I recall many years ago when I was the controller of audit reporting on a case in local government where exactly that had happened and different, but serious governance concerns were raised. It can sometimes happen where the scope of the job changes significantly, but we would expect to see a full options appraisal with proper costings and then proper board approval of that before it happened. The avoidance of doubt has not happened here. Do you know—I just was not quite clear from the report and, given something that we will be looking at later—was the early retirement enshrined in a settlement agreement? No, we do not think that it is. We think that Mr Foley's payments on respect of an already approved voluntary redundancy oblique early retirement scheme, which is the early retirement component of it, and the payment in lieu of notice is in reference to one of the standard operating procedures of the SPA, which gives the board the option to terminate an employee's employment with immediate effect, which is effectively what happens with the year rather than working in the notice period. I understand. There is no settlement agreement and therefore no confidentiality clauses. On the payment in lieu of notice, just for the avoidance of doubt, are you aware if this was a taxable payment and tax was paid in full on it? We have not audited this payment yet and it is something that we will return to in 2017-18. Monica has indicated that she does not want to ask the question. Just for clarity, in your work, can you confirm that you did not find any fraud or illegal act? Correct. We have not discovered that. Given what Liam Kerr was saying about breach procurement rules out of policy payments, how close to being a fraud or illegal act did you consider those? We gave full consideration to that. We took advice of senior colleagues, our audit is subject to a peer review to test some of the key judgments, one of which was those, and came to a judgment that the payments were regular and they did not represent fraud, particularly with reference to the relocation payments. We are clear that those were consistent with the Police Scotland regulations and consistent with the DCC's letter of appointment to the organisation. In your opinion, you have given an opinion on regularity. Those sort of sound irregular situations, given that you have raised them here and we have discussed them. Perhaps the term irregular might be a common use. Why is your opinion not qualified? As you say, that is a key part of our opinion on regularity of expenditure. We were satisfied that, as a reference, the relocation payments were regular, and that they were consistent with the laws and regulations governing them in respect of the Police Scotland regulations. In respect of the other elements that are captured, I guess that there are two components. One is important that there are key matters emerging from the audit, and we have reported them to the Auditor General through the section 22 report on my own annual audit report. The concept of materiality applies within the frame as well, so materiality for the audit—for give me one second, there's just a— I would say materiality, of course, is not just a number. Quite it's whether it's a mission would be of interest, shall we say? If I'm going to just maybe say a wee bit more about that, the overall materiality for the audit is £14.19 million, nonetheless, as you quite rightly say, Mr Bowman, that within, for example, the remuneration report, that is a specific element of our work to capture the accuracy and completeness of that. As we referenced the annual report and accounts that were presented to the SPA's Audit Committee, that they excluded the relocation payments from the remuneration reports, had they not been subsequently included, that most likely would have had an impact on our audit opinion. However, as we see from the annual report and accounts that that, those amounts were subsequently corrected and properly disclosed, allowed us to come to the judgment, and one that we tested to make sure that we were satisfied in the completeness and soundness of it to come to that judgment. Let me just come to a couple of points then. In paragraph 8 of your report, you talk about something not being value for money in use of public funds, in paragraph 12 you talk about not good use of public money. Do those mean the same thing? Essentially, yes. Those are judgments on those points, so we are not satisfied that they are a good use of public funds, but not that they then ought to have led to a qualification of the audit. It is just a slight variation in the wording. How do you actually make that judgment? It is not a technical term. Is it that there is no set down rule as to what is good or not good? That is correct. It is a judgment from our collective experience and what we see across the public sector and the importance of the good use of funds. Of those examples, we reference the fact that what was the norm for payment of two directors within the organisation and that those amounts are disclosed. Particularly if we note some of the payments made to an interim director of people and development for four months' work, we did not consider £106,000 to represent a good use of public money. Equally, in respect of the interim chief finance officer for Police Scotland, a payment of nearly £200,000 for 10 months' work in the context of the other senior finance officers in the organisation being paid considerably less on an annual basis led us to the judgment that they did not represent value for money. Do you put yourself in the place of management at the time and what was facing them? You would have done something different? Not necessarily. We recognise the importance of financial leadership. Particularly in one of the examples of the interim chief finance officer for Police Scotland, when the organisation sought to procure those services and eventually ended up with a synchornment from PWC, the terms of engagement suggested that the salary would be around an annual figure of £100,000. That ended up considerably more than that led us to the view that it was not a good value for money. At the point that those decisions were being made, the SBA had been in existence for more than three years and they were still operating with interim senior officers in key financial positions. The context of having not made decisions to appoint permanent staff over that period had both led to problems with financial management and financial leadership and was still leading to the incurring of significant amounts of expenditure, which is why I took the view that I did in my section 22 report. In terms of drawing and making an opinion, given what we have heard about the board and your concerns about it, when you drop your opinion, decide whether you have a modified opinion or even any opinion, you tend to rely on board representations, have trust and faith in the board. You do not seem to have that, yet you gave it a clean opinion. That is correct. We consider that in setting our audit plan at the start of the year, keeping that under review, and as we report in the annual audit report, we also draw attention to some of the weaknesses in the control environment within the organisation and in the annual audit report. I am talking about the financial statement. That is correct. Reading those, everything is fine. In terms of how that led to the opinion and the work that we need to derive to gain the assurance, it led to a considerable increase in the volume of substantive testing, and Carol may wish to say more about how that manifested itself. One of the things that I would say in terms of the financial statements of the Governance statement picks up on the control weaknesses within the environment, and that is something that we built in. Significant audit testing was required to give the required assurance that the accounts were not materially misstated. Do you have faith in the board? We are clear that, in some of the judgments that we have reported today, that they would have been better served and being visible to the board to test those judgments. I think that, as we also report specifically on the example of Mr Foley's departure, that the decision that they took to take that decision by correspondence was not a good decision. That is just one final question. What board representations have you relied upon when we hear that perhaps they were not fully aware of all matters? One of the audit procedures that we undertake is to receive representations from the accountable officer and notwithstanding the issues that we have discussed today. We also make representations of the audit committee, as those charged with governance about the completeness of the financial statements and the accuracy thereof. As Carol has mentioned, that is what only takes us so far. The main thing that we ought to do is to extend our detailed sample testing to derive the assurances that we felt necessary to produce the opinion on the accounts. You will take account of Mr Neil's comment on some of the board members. Before I bring in Colin Beattie, I want to pick up on something that Mr Boyle said. If I have picked you up correctly, it seems to suggest that some of Mr Foley's package has been paid, but some remains to be paid. Could I seek to understand whether payment could be stopped if the SPA chose to do so, or whether that is part of a contractual agreement? To take that in reverse, convener, we understand that it is part of a contractual agreement. We do not know, as at today's date, whether the payment has actually been made. We know that Mr Foley left the organisation on 30 November, and that the payment in lieu of notice was due to be paid in December. I am not sure whether that physically has now left the organisation. I want to quickly touch on something that has already been talked about, which is the appointment of temporary senior staff, which is a fairly substantial budget item. Looking at the governance over that, to what extent were the board involved in the appointment of those people? I see, for example, that the interim director of people in development was charged £1,000 a day, which is a lot of money. Presumably, that would have been a board appointment. I may not have all the detail on the appointment, Mr Beattie, of the interim director of people and development. I may need to follow through that with the committee. I think that the main judgment that we are making in that regard is that it is the value for money and the extent of the costs for four months' work, rather than the specifics of the decision making process. Obviously, there is a concern about governance that keeps coming out and about decisions being made that perhaps have not been properly discussed and assessed by the board before that decision is taken. I would be keen to know whether it is simply Mr Foley who made that decision. Was it a board decision? Specifically, in terms of the interim people director, that was a Police Scotland appointment rather than the SPA. That process was led by the Deputy Chief Officer of Police Scotland through our recruitment agency to produce candidates and the resultant appointment. I highlighted that one because it was £1,000 a day. The other one is a little bit cheaper. It is £950 for Police Scotland interim financial officer and £350 a day for SPA interim chief financial officer. The other quick thing that I would like to ask is that there was an offer made for an interim SPA chief financial officer by John Foley and that it was retracted. Do we know why? Was the board involved in this? Was there transparency around how that came about? We understand that Mr Foley led the appointment and recruitment process working with the procurement department in Police Scotland. We highlighted that because of the non-compliance with policies and the importance of such things, we would expect that the SPA's policy is that a number of employees would be charged with scoring any tender process, but in this instance, what we have seen is that only Mr Foley scored the interim chief financial officer's appointment. The process was flawed in the first place. We are saying that it is not the policies themselves that are in any way in doubt, it is just the associated compliance with those policies. Do we know the reasons why the offer was retracted? I do not have the position of that. I would need to—maybe a question for SPA to confirm. Do we know whether it was referred to the SPA board? Again, apologies, I would need to go back and come back to the committee on that point. Willie Coffey had a small— Thank you very much, convener. Maybe I have missed this during the discussion, but where was the role of the internal audit in the whole process? Were there—did they have an internal audit team and did they give all of this a cleaning order? Scotland Cree for the internal auditors for the SPA, and their work covers a number— Internal auditors? Internal auditors, yes. Their work covers a number of areas across both the SPA and Police Scotland's business. We rely on Scotland Cree's work. We think that it is of a high standard, and we have also noted that they too have produced some very critical reports of SPA and Police Scotland's arrangements. In reference to one of the earlier questions, as a consequence of Scotland Cree's work, that led us to the judgment about some of our own approach, particularly the increase in substantive testing. So were they themselves critical of this whole approach and were their comments, recommendations or otherwise ignored by the board? The internal auditors produced an annual report on the organisation, and that, too, highlighted some significant weaknesses. That, okay. That weren't actioned or taken up, accepted by the board. The arrangements that the SPA and Police Scotland have for monitoring and following-up audit actions has improved. There is a detailed discussion and a log of any matters that are brought to the attention through audit reports, and those are subject to detailed discussion at audit committees. I think that, as the Auditor General suggests in response to a previous matter, auditors will report what they find based on the scope of the work and the planned programme of activities. Certainly, we are clear that Scotland Cree's reports are full and complete, and we continue to place your lines upon them. Can I, in wrapping this up, just ask for one further point of clarification? In the SPA announcement on 21 August that Mr Foley had opted to take early retirement, he issued a statement. The statement said that, although the CEO role becomes redundant from 1 September 2017, the board has given consideration to the most appropriate point for the accountable officer responsibilities to transition, including seeking the view of Audit Scotland. What did they ask you, what did you say and did they listen to you? We'll take that between us, convener, and I'll kick off. I took a phone call from the vice-chair of the authority of the board on 24 July, in which she told me that she was reviewing the scope of the chief executive's post on the basis of HMIC's recommendation about forensic services. I thanked her for letting me know. I said that, of course, we would need to audit that and asked her to liaise with Stephen Boyle as the appointed auditor of the SPA. I met the vice-chair in August and she talked to us through the timeline and process that they had gone through to date. We asked that she provided us with some of the evidence to support the decision making process and she provided us with some emails and more of the timeline that was provided to us in mid-September. You questioned the information that you were provided with? We went through the evidence and used that in the compilation of our report and then I had a further phone call with the vice-chair in mid-October, convener. As well as being the recipient of the information, what did you say back to the vice-chair of the SPA? At that particular reference to the October meeting, in light of what we'd seen and particularly brought in the other matters that were before you today, we got a reference back to the earlier discussion today, whether that prompted them to pause and reflect on any of that before making their final decision. The vice-chair was clear that it didn't. You made recommendations to them and they didn't stop and think about what was happening. Is that a fair comment? Yes. Thank you very much, that's very helpful. I've been around politics a long time but this is probably the most shocking example I've seen of financial mismanagement and poor judgment, indeed poor judgment, about accountability and poor financial judgment, made by the accountable officer in this case, Mr Foley. We've heard Ivan watering sums of money, quite extraordinary expenditure, signed off by him without reference to the board, so I am looking forward very much to your 1718 report. I hope that it will be robust and I hope that it will also take the opportunity to look back at whether that practice happened before 1617, because I'm sure that it didn't just arise in this financial year alone. When you consider that the Scottish Police Authority and Police Scotland are facing huge deficits in terms of the long-term financial projections, £47 million this year coming, £35 million the year after continuing deficits, I find that, frankly, quite shocking and incredible. The committee will reflect on the evidence that we've heard today. I thank the witnesses very much for their evidence and will now take a short break as we introduce our next witnesses. Can I move us to item 3 on the agenda, which is settlement agreements and will take evidence from the Scottish Government on the related topics of settlement agreements and severance policy? Can I welcome to the committee this morning Paul Gray, director general health and social care from the Scottish Government and also, of course, chief executive of NHS Scotland and Paul Johnson, who is director general of education communities and justice for the Scottish Government. I understand neither of you wishes to make an opening statement, so I will maybe helpfully set some context, so bear with me. The Scottish Government prepares an annual report on settlement agreements, which are legally binding contracts between employers and employees to resolve employment disputes. Separately, we recently wrote to the Scottish Government to highlight some instances where people who may have been at least partly responsible for a performance issue at a public body were no longer in post by the time we came to consider the order to general's report. The committee noted our frustration about how such individuals could be held to account and said that the award of agreement should be very carefully considered. In short, our concern was that failure should not be rewarded. In its response, the cabinet secretary for finance and the constitution noted our frustration and said, I fully agree with the committee's view that failure in public bodies should not be rewarded. The cabinet secretary also said that the Scottish Government's recent consultation on a severance policy for Scotland did not set out to respond to our concerns. He said, however, that our raising issues about exit payments provides increased focus on the opportunities to claw back exit payments, especially where failures are apparent. We will hear from officials about the progress that the Scottish Government is making with its policy, how the Parliament and its committees will be kept informed, and how taxpayers can be reassured that money is being well spent. Before I move to a very gentle opening question, I think that both the witnesses will be aware that the committee has taken evidence this morning on the order to general's report into the Scottish Police Authority. I would not be surprised if members wanted to explore some of those issues with you in relation to payments made to public sector employees. First, let me ask a question on settlement agreements that we have previously asked, but were not answered fully. The Scottish Government said that it would adopt across wider public bodies the NHS Scotland approach to the use of confidentiality clauses, i.e. a presumption against their use unless there were clear and transparent reasons for their inclusion. Despite that, the use of confidentiality clauses by the Scottish Government and public bodies increased from 21 to 36 between 2014-15 and 2015-16. The question is, therefore, can the Scottish Government influence the number of confidentiality clauses used in a particular year or not? Mr Johnson. Can I start by acknowledging that I have heard the earlier discussion and, of course, anticipate the committee's interests in the issues around the Scottish Police Authority in particular, what role the Government exercised in that matter? We will seek to ensure that the committee is furnished with all relevant correspondence between the Government and the SP, and I appreciate that you may wish to come on to that in more detail later on in the session. In relation to your specific point about the number of confidentiality clauses that have been inserted, the numbers are all set out in the report that you have in front of you. The position that we have is that confidentiality clauses will not be inserted automatically. Indeed, there is a presumption against their use. However, there are situations where either the employee or the employer wishes and has reason for including a confidentiality clause. The role of the Government will be to consider and advise on the use of those clauses. One point that I know has concerned the committee that we can be very clear about is whether, in any cases, the use of a confidentiality clause might get in the way of an individual making a protected disclosure under whistleblowing legislation. We can be very clear that there are no circumstances in which an individual could be prevented from making such a disclosure. Liam Kerr wants to come in with a supplementary. On the confidentiality clauses, I do not understand why there is a presumption against using them. I also do not understand, in the letter that we have had about where you talk about confidentiality clauses, that they are used at the request of the employee or their legal representative. I do not understand that, because as an employer I would want the confidentiality clause. It is more important to me as an employer to secure confidentiality than the employee or their legal representative. Why is there a presumption? My understanding is the presumption. If we look back, at one point, confidentiality clauses were inserted as a matter of routine. Previous committees have expressed concern about that routine practice around the use of confidentiality clauses. Having reflected on those concerns, the decision was made that they should not be inserted as a matter of routine, and rather the presumption would be that there would not be a clause. It would then be for consideration to be given on a case-by-case basis as to whether there was a desire for the clauses to be inserted. My understanding is that the employer can also request a confidentiality clause, as well as the employee. That is slightly different from the letter, but we are the employer in this situation. The public is the employer. I would have said that the confidentiality clause is about protecting the employer. It is about securing or the agreement is about protecting the employer and making a payment by the rights of the employee. We have a list in the appendix of payments that have been made. The two of the top three agreements in terms of cash sum that have been concluded do not have a confidentiality clause. One of those payments is more than £200,000. I find that extraordinary, but is that just the way it is? That reflects the fact that there is consideration given on a case-by-case basis as to whether or not a confidentiality clause is needed and is requested by either of the parties. My first question is to Paul Johnson. Paul, at the moment, there are a number of people suspended by Police Scotland. The chief constable has been in special leave since September, I believe. I think that it is four other fairly senior officers who are suspended, one of whom has indicated that he is taking his retirement in the meantime. What is the status—what is the current status? I realise that you cannot comment on the detail, but what is the current status in terms of when these investigations have been completed, when are they due to be completed and when will that be brought to a conclusion? In a number of the cases to which you refer, the investigations are being conducted by the Police Investigations and Review Commissioner, who is acting as an independent person. I do not have information today about the time period for the investigations that she is conducting. I can certainly seek to obtain further information about that and provide that to the committee, but I do not have it today. Can I ask about the investigations into the allegations against the chief constable? Has put concluded the investigations into the allegations against the chief constable? No, my understanding is that those investigations are still on-going. Okay. Do you have any idea when they are likely to be concluded? As I say, as of today, I do not have information about the time scale that I can provide to the committee. There is no indication from the SPA that they are involved in the investigation? I know that the SPA is certainly engaging with the Police Investigations and Review Commissioner on the issue, having first passed the matters to the Police Investigations and Review Commissioner. However, as I say, I am sorry, I do not have details as to the time frame for the investigation completing. Is it not true that the former chair of the SPA Andrew Flanagan wanted the chief constable reinstated? Well, the understanding that I have is that the Scottish Police Authority gives consideration to whether or not the period of leave will be brought to an end, and it does so on a regular basis. The last time that has been considered, again, my understanding is that the board agreed that the period of leave would be continued. There has been no representation from Andrew Flanagan to have the chief constable reinstated? There have been discussions around whether or not the chief constable should return, and my understanding is that at present, as I say, he is not suspended. He is on a period of leave, so absolutely these matters have been discussed and considered carefully, but the most recent position is that the chief constable's leave continues for the time being. Just to be clear, in any of those discussions, did Andrew Flanagan ask that the chief constable be reinstated? I think that there have been points at which the view of the former chair was that it may be suitable for the chief constable to return. And how long ago was that? I do not have the specific dates, although, again, I could… October and November? Certainly in recent weeks. So what is the procedure? Does the chair make that request to the cabinet secretary or to the Government or to yourself as the accountable officer? What happened? Did Andrew Flanagan come to you and say that he wanted the chief constable reinstated? What was the procedure? It is a decision for the board as to whether or not the chief constable's leave should be continued. Indeed, the chief constable clearly has a role in the arrangements. There have been discussions with the Government on those issues. The position of the Government is that, in all those considerations, it is important that the board considers the full range of circumstances, and that includes the need for the board to engage with the police investigations review commissioner on whether or not reinstatement should take place. Can I just clarify? There is a very strong rumour going around, and I do not believe rumours until I hear the fags. There is a very strong rumour going around that Mr Flanagan wanted to reinstate the chief constable, because the investigations found that the chief constable had done nothing wrong. Is that true? I would be very loath to comment on any rumours. All I would say is that the investigation to the best of my knowledge has not yet been concluded and is still on-going. The board has decided most recently that the chief constable's period of leave should be continued. Just to be clear, the previous chairman made representations to the view that the chief constable should be reinstated. What I can confirm is that I understand that, at certain points over recent months, the former chair of the authority was of the view that reinstatement may be appropriate. Why did that not happen then? Is that a Government decision? No, it is a decision for the board. From the point of view of government, I can confirm that our interest has been in ensuring that proper processes and procedures are followed at all times, as you would expect. We have certainly wanted to ensure that the police investigations and review commissioner would be involved and would have a say in her view on the return or otherwise of the chief constable. Presumably, what you are saying is that, when the former chair made it clear that he wanted the chief constable reinstated, the Scottish Government's position was that that is a matter for the board and the Scottish Government would have no view on the matter? The view that I would take is that, while it is a decision for the board, there is an interest on the part of the Government in ensuring that due process has been followed at all times. We would certainly seek assurances that due process was being followed. The former chair said that he wanted the chief constable to be reinstated. He was satisfied that due process had been complied with. Presumably, if he made that request, the response from the Government would be that is a matter for the board, or would the Government express a view as to whether the chief constable should or should not be reinstated? It is not for the Government to make a decision at this stage on whether or not the chief constable should or should not be reinstated. I did not quite ask that question. No, but discussions that we have had with the police authority on these matters have focused on the need to ensure that due process is followed and that those with an interest in particular, the police investigations and review commissioner, are consulted. Can I just ask then finally to be absolutely clear when Andrew Flanagan asked that the chief constable was reinstated, that the Scottish Government's response was not to refuse to allow that to happen? In the course of discussions about whether or not the chief constable was reinstated, the Government's concern and the point that the Government has emphasised is around the need for due process to be followed in that matter. That is not my question. My question is, you see and confirm that Andrew Flanagan did request or did say that the chief constable should be reinstated a number of weeks ago. So, why has he not been reinstated? Well, at least in part, that is likely to be because of the point that I have emphasised, that the need for full process to be followed, the need for those with an interest and a locus in this issue to be consulted and for proper consideration to be given to the issues. My understanding is that that now having happened with parties having been consulted, the decision has been taken to continue the period of leave. So, who is consulted? Well, in particular, my expectation is that, given that the police investigations and review commissioner is the body with the possession of all of the facts that she should be consulted before decisions are made on return. Before Andrew Flanagan made that request, he must have been aware of the outcome of the investigations into the allegations against the chief constable. One presumes that the chair did not express the view that the chief constable should be reinstated without him first of all being cleared by Park. Given that that would be the situation, unless you are telling me that that was not the situation, he has expressed the view that the chief constable should be reinstated. Was that discussed at an SPA board meeting? The SPA board has certainly given consideration to those issues, yes. Specifically, the chair's view that the chief constable should be reinstated, was that discussed at the board, was that considered at the board? I am sorry, I do not have details. I think that those are issues that will have been discussed in part by the board meeting privately and I was not a party to those discussions. I know that you are not party to it, but you know that you get the agenda in advance. I think that you need to be a bit straighter with us, remember that you are effectively under oath. I will ask you again, has the SPA board discussed the view of the then chair that the chief constable should be reinstated, yes or no? I think that the SPA board will have discussed that. I am not sure that it would be on a formal agenda, certainly not on a agenda that I have seen on the basis that those would be matters that would be discussed privately, but I am certainly clear that the role for government here is around due process and we have made clear our expectations that due process will be followed. You are telling me that the SPA board has only, in discussing this item, which is of absolutely top importance to the whole police service in Scotland, where we have an individual, the chief constable, on £210,000 a year, presumably on full salary, while he is on special leave. That was not done at a formal board meeting, that it is part of the kind of underhand activity that we heard about earlier. Well, I think that there is provision for the board to meet in private, and my understanding is that those decisions were made privately. So, there was a private board meeting that discussed whether, in the view of the chairman, if the chairman was right in wanting the chief constable reinstated. So that was a private meeting. You obviously had advanced notice that it was going to be discussed, even though the discussion was in private and you are not part of the discussion. So what was the outcome of the board meeting? We would not necessarily have notice of a private board. Come on, Paul. We are talking about the chief executive. Are you telling me, as the accountable officer, that the SPA board meets in private to discuss the view of the then chairman that the chief constable should be reinstated and you, as the accountable officer, do not know the outcome of that meeting? I do not believe you. Well, I am confirming that I am not cited on all of the private meetings of the Scottish Police Authority. I have confirmed to you that there have been discussions with the chair, about the former chair rather, about whether or not the chief constable should return. The concern of government is that that is a decision that is taken properly and with full regard to due process and that has been the extent of our involvement, the extent of our involvement has been to require that due process to be followed. So you are saying, as the accountable officer, you were aware of a private meeting of the SPA board to discuss the view of the former chairman that the chief constable should be reinstated. You cannot tell me when that meeting took place. You cannot rightly tell me that you were not involved in those discussions, but you cannot tell me the outcome of the meeting. Surely the chair would have at the very least phoned you and said, look, we have had this discussion and this is the view of the board. What you are saying is quite frankly not credible. Well, I was not called after meetings to be told about the outcome of the meeting. This meeting was a number of weeks ago and you do not know the outcome and you are the accountable officer. I am the accountable officer for the justice portfolio. I am not the accountable officer for the Scottish Police Authority. The Scottish Police Authority itself is responsible for ensuring that it complies with its obligations as the employer. So do not be told to the cabinet secretary that the chair wants to reinstate the chief constable. The SPA board has discussed it in private and nobody has told the cabinet secretary that they are discussing it or what the outcome is. Is that what you are telling me? Well, I am saying that the SPA is able to meet privately, but on an issue such as the reinstatement of the chief constable, I am also absolutely clear that the role of government would be around ensuring that all due process is followed. I think that if we look at the situation as at present, you can see that the chief constable remains on leave. Can I just clarify? Has there been any refusal by the chief constable to come back to work? Not so far as I'm aware. Could I ask two questions just arising from that, just so I'm clear? I'm very clear that you didn't receive a call from the SPA chair. Did anybody within the justice department receive a call with the outcome of that meeting? Not to the best of my knowledge. Okay, so no call was received, they didn't tell you anything, they didn't give them the sensitivities, report to anybody at all within the department? To the best of my knowledge, there were no discussions with officials on the particular matter to which you refer. Okay, was there a discussion with any ministers then? So, as I say, there have been discussions with the cabinet secretary about the issue of the return of the chief constable and the emphasis that was given in those discussions was around the need for proper process to be followed. Okay, was the outcome of those meetings then, or that final meeting, reported to the cabinet secretary? My understanding is that now this is a matter that receives on-going consideration. Sure, sure, but I'm asking— There is now—my expectation is that there is full engagement with Government to ensure that we are aware of both when the consideration has been given, the matters that are being considered, and the outcome of those discussions. Okay, so if I shorten that, you didn't receive the phone call, but the cabinet secretary did, as part of this on-going engagement that you talk about. There have been all those on-going discussions with the cabinet secretary. That's fine, but I'm slightly confused. Let me ask you about why did the board meet to discuss this? What happened that they met to discuss this issue? I think that the position that the board arrived at when agreeing to the special leave was that it was a matter that they would keep under regular review. Oh, why at this point? So they agreed to keep it under review every few weeks. Genuinely, I'll bring in Alex Neil in a minute. The thing that I can't get my head round is why would you have this discussion unless something triggered it, unless they had been briefed or advised in some way that the likely outcome of the investigation was to find that there was no case to answer. If that was the case, I could have understood why the board had met to discuss this and why there was such an emphasis placed by the chair on reinstatement of the chief constable, because that isn't part of a regular review. They've heard something, which is why they've adopted that approach and reached a conclusion. I don't know if you want to comment on that before I bring Mr Neil back. My comment is that this is a matter that the SPA agreed to keep under regular review, so they were having on-going deliberations about the issue. Did they decide at any point that they wanted to reinstate the chief constable until that last meeting? As has been discussed already, I have acknowledged that at points the view of the former chair was that the circumstances may be justifiable to reinstate the chief constable or rather for his period of leave to be brought to an end. Alex Neil. Can I just say that you said that the only reason why the Scottish Government would be concerned would be if due process had not been completed, correct? Yes. So had due process been completed, has there any part of the process outstanding that is given you cause for concern that you don't believe due process has been followed? My understanding is that at certain points, including when the former chair had expressed the view that it may be appropriate for the chief constable to return, at that point there had not been proper or full consultation with the police investigations and review commissioner, hence the wish on the part of the Government for that to take place. And when was this? Was this in November? I'm sorry, I think it would have been November. I can furnish the committee with more information on precise dates. I don't have them in front of me. So on the 21st of December, you have a chief constable who's on special leave, whichever that means, whose reputation has been tarnished because of events, rightly or wrongly. I don't know the outcome of the investigations, obviously. Surely it's a matter of natural justice to him that these matters be cleared up as soon as possible. So you're saying that it's still not clear or you still haven't had the discussions with the chair of PICC to see if the due process has been followed? I agree that it's important that proper investigation is taken forward as speedily as possible and my understanding is that that investigation has not yet been concluded. So why would the chair recommend reinstatement then, former chair? Well, the circumstances of the chief constable being on leave, what I understand from the SPA is that the chief constable was on leave partly to enable him to prepare his full case and to engage with the police investigations and review commissioner. I find a lot of this, quite frankly, not credible. I think we need to call our next meeting, I think, the chief constable Andrew Flanagan, as well as probably the new chair, convener. The committee will consider that in private session. Can I invite Liam Ewing? Liam who? Oh, sorry. Oh, my goodness. That is an old friend, Liam Kerr. Indeed. And I'm not an old friend, Jackie. You're a new friend. Sorry. So a couple of questions up front just about the Scottish Public Finance Manual. There is a section in there relating to settlement agreements. And a couple of terms I'm just seeking clarity on. First of all, on voluntary resignation, which caught my eye because, as opposed to an involuntary resignation, which I would have thought would be more like a dismissal. But there's a quote where it says, where a proposal has been made by a relevant body to offer a financial consideration to secure the voluntary resignation. Now, that sounds like an offer that one can't refuse. Can you explain what securing a voluntary resignation is? Well, I think we've provided to the clerk a definition of the various terms that are set out in the Scottish Public Finance Manual and acknowledged that there are quite a lot of different terms, so we do need to proceed with caution in relation to them. Certainly my understanding of the provisions of the manual is that voluntary resignation is an overarching term, and it is then possible to have specific schemes around voluntary exit—either voluntary release or voluntary early retirement—approved by a particular body. On a case-by-case basis, it is possible to have unique schemes or, indeed, settlement agreements. If there is remaining doubt about terminology and definitions, then I agree that it is very important that that is clarified. That is something that I suggest that we should do in writing. I think that that is important. I will come back to the early retirement in just a second, if I may. I suggest that we should not have to proceed with caution in relation to terms. We should be absolutely clear what terms mean. I just want to press you on something else, which I might call because a distinction is made between severance agreements and a settlement agreement. I forget exactly where a severance agreement is defined as a subset of a settlement agreement. Can you explain the difference to me, because I am not familiar with the difference between a severance agreement and a settlement agreement? It is quite the way that you put it, if I may say. Severance arrangements are the overarching term that captures a number of different arrangements that are set out in the Scottish Public Finance Manual. Settlement agreements are a subset of them. A settlement agreement is the document that is used in cases where there has been some breakdown in the relationship between the employee and the employer. The report that has been submitted to the Parliament that the committee is considering today focuses on cases where settlement agreements have been put in place. The Scottish Public Finance Manual makes it clear that where there is a settlement agreement, it is important that there is prior consultation with Government. However, there are other situations of severance or departure that are not caught in that term, settlement agreements. As I say, they may be covered instead by a severance scheme. I was with you until that last phrase, Paul. Sorry. Covered by a severance scheme? Yes, exactly. It is possible that I will try to get the right part of the guidance. There are a number of references in the section of the Scottish Public Finance Manual that talks about existing or new schemes. Those are schemes to enable the early departure of employees in an organisation. The scheme requires approval of Government if a public body is going to set up a scheme. What we have in the case of the Scottish Police Authority is an agreed scheme that has existed for a number of years but that is reviewed and approved by ministers. The committee will appreciate that, given the significant change that is involved in police reform with a number of organisations merging into one, it has been necessary and appropriate to have in place a scheme. The scheme is approved and it is then for the public body to make individual decisions once the scheme is in place. Those are not settlement agreements. Let's look at the scheme. You have heard some events from earlier this morning that we have looked at. Paragraph 1 of the annex A that we have, which is the annual report on the use of settlement agreements, the Scottish Public Finance Manual states that, in considering terms of settlement agreements, severance, early retirement or redundancy packages, public bodies should ensure issues of regularity, propriety and value for money are fully taken into account. Given what you have heard this morning, how obligatory is what I have just read out in your paragraph 1? I do not think that I can add to the paragraph, really. It is important that public bodies are taking these matters into account. It does not appear that that is what has happened this morning from what we looked at. It does not appear that there seems to have been a breakdown between what is stated about the SPFM and what has actually happened in practice. Do you accept that? My understanding is that the SPA's view—certainly the view that has been expressed to me by the SPA—is that, in the circumstances of Mr Foley's departure, it considers that the options that it exercised meet the tests. That is the board of the public body in question, whichever that may be. The board is accountable if it has failed to do what is required by the Scottish Public Finance Manual. Ordinarily it will be for the accountable officer to ensure that those requirements are met, but where the matters relate to the accountable officer, him or herself, then the board needs to consider those issues. Do you have a view? I am just moving on from that specifically. Let us say that we have a severance package, which you would say would be embodied under a settlement agreement, presumably. Once individuals have left an organisation, how can they be held to account by the committee and by the public if they have gone away with a package under a settlement agreement? I am not sure whether it is helpful to make the distinction again to emphasise that there is no settlement agreement in the case that the committee has considered this morning. My assumption is that the committee could invite an individual who has received an agreement to come and give evidence, even though they are no longer employed by the particular public body. Of course, the committee could invite them to give evidence, but how is that individual, if the committee, if anyone else finds that there has been mismanagement, impropriety, whatever it might be, how is that individual held to account and how is the public recompensed if there has been a settlement agreement? Well, I think that clearly if it was concluded that the settlement agreement had been issued and there had been a clear failure to meet some of the required tests and standards, then I would absolutely want consideration to be given as to whether there was any possibility of recovery. I think that a lot of those things will depend, though, on the individual contractual arrangements that are in place and the specifics of the contract between the employee and the employer. I am sorry, but I certainly do not have a complete answer to that given the need to look at what the contract would actually say in the specific cases. Are you aware of any cases where let us take an individual? They have perhaps underperformed. Perhaps there is a section 22 report that has been presented to the committee. Perhaps they have left an organisation, maybe under a settlement agreement, perhaps not. Are you aware of any cases where an individual such as that might have been re-employed in the public sector? We have a rule in place in the Scottish Government, which has operated from 2015, and it is a five-year no-return policy. Therefore, if an individual receives a payment, whether under a settlement agreement or not, they may not be re-employed in the Scottish Government or by any of our associated agencies or bodies for that five-year period. To be clear, the associated bodies include all those that were listed in your letter at the appendix. Is that all of those bodies? Can I just pursue that for one minute? None of them are brought back as consultants? That would certainly be one of the circumstances that I think would breach that five-year no-return rule. That is interesting, because I understand that some have indeed been brought back as consultants. That is certainly something that I would be happy to look into. Excellent. Can I continue the line of discussion? Let me just be very open here. You heard the evidence that we took from the Auditor General on the 1617 annual report into the Scottish Police Authority. You heard the evidence that we received about very poor financial judgment, very poor accountability and governance arrangements, which the committee found to be quite shocking. I wonder whether I could explore with you both the package arrived at for the accountable officer, in this case the former chief executive, John Foley, and some of the decisions that were made by him in his capacity as accountable officer. To be clear about terminology, by the Scottish Government's own definition, a severance package includes early retirement and redundancy payments, both of which seem to have come into play in Mr Foley's package. We heard that payment might not have been completely made at this point. Can I ask whether there is the opportunity to pause that payment and whether you would go away and investigate that as to whether that would be allowed under whatever contractual agreements you have come to with Mr Foley? My starting point would be to emphasise that there is not a contract between Mr Foley and the Scottish Government in this issue. My clear understanding is that the contractual arrangement is between the Scottish Police Authority, as his employer and him, and that a contract was entered into for his release in August. I do not have all the information as to when exactly payments have been made and whether payments may yet be made. In light of the committee's deliberations today, I can certainly ask the Police Authority to confirm whether payments are outstanding and whether they could be paused. That would be enormously helpful. Although I recognise that the contract may not be with the Scottish Government, you are the sponsoring department and therefore have some responsibility in my view in ensuring that those things happen. We are interested in pursuing who knew what and when they knew it and people's involvement in all that. We understood that the decision was taken by the board about Mr Foley's package, by email, and that at some point between 7 June, when the options were considered, and indeed most recently, the Scottish Government was most certainly advised. Emails were exchanged with senior civil servants. Could you tell us who those civil servants were and whether it was brought to your attention that those discussions were on-going? My starting point in that would be to emphasise that at no point was the Scottish Government consulted or at no point was the approval of the Scottish Government sought on the payment that was offered. I would also wish to emphasise that at no point was the Scottish Government's approval required, given that there was an existing scheme in place. That is not to say that there are not issues thrown up by the case that is required to be looked at very carefully with a view to looking at whether changes might be needed in future. At no point was the Scottish Government's specific approval sought. As you would expect, there are a number of engagements that take place between officials in the justice and safer communities directorates and the Scottish Police Authority about a range of on-going issues. I am aware that some conversations took place over the summer about the proposed arrangements for Mr Foley's departure. As I said at the outset, I can see that there is an interest in the precise chronology of those and I can seek to provide the committee with further information about exactly what communication took place by whom and when. What I can say is that I wrote more formally to the chair of the Scottish Police Authority about the payment in November when I was aware of the concerns that existed, both on the part of colleagues in my team and the part of Audit Scotland. I can furnish the committee with that correspondence. That would be very helpful. I would be keen to capture not just the email exchanges but any verbal exchanges that would have been noted of a matter of this importance. It is customary for civil servants to note those type of conversations. We would be interested in seeing that as well. I am very clear that, although your approval was not sought and the Government's approval was not sought, you knew about the on-going discussions, the options and you would have in the course of those conversations given guidance as to what the Scottish Government's view would be. Is that a fair summary of what you have said? It is fair and I would go on to add that I expressed reservations or concerns about the issues around payment and law of notice that the committee has considered today. I think that that is very helpful to have on the record. Turning to your severance policy and interpreting that, it is very clear that notification needs to be given to the sponsoring department in the Scottish Government, and that seems to have happened, but where issues are sensitive, they are escalated to ministerial level. Therefore, I am curious to know, given how active the cabinet secretary was on the previous issue that you explored with Alex Neil, whether the cabinet secretary knew about the on-going discussions that were going on? Can I be clear in terms of the severance policy set out in the public finance manual that the need to consult with ministers applies in the case of individual arrangements where there is a settlement arrangement? It does not apply specifically in cases in which exit is agreed as part of a scheme that has already been approved, which will have been subject to ministerial approval. However, I absolutely recognise the high-profile nature of this particular exit under the approved scheme. Although we did not need to and did not have an opportunity to approve it, on being made aware of it, we would have briefed the cabinet secretary on what was proposed. The cabinet secretary knew that that is helpful again to have on the record. I am conscious of time, so let me ask you two very quick points. I will wrap it into one. You are responsible for conducting the annual review of Andrew Flanagan. Are you not? He is responsible for conducting the annual performance review of John Foley. Was there anything in your discussions with him as part of his annual performance review that highlighted the serious concerns that we are now considering? How did you rate their performance? All of the issues that the committee is considering today have arisen in the context of the audit that has been done in recent months by Audit Scotland. I have, over the period of the chair's appointment, been in regular engagement with him and, indeed, there are formal performance appraisals conducted. Those are obviously discussions between two individuals. I do not think that the committee would expect me to go into all of the details of those. I have clearly been in front of the committee before where other issues have been raised around governance in the Scottish Police Authority, and I can confirm that they absolutely have been discussed between myself and the chair. It can only appear to me that he was not really listening when you were making some of the comments to him. I do not know if other members would like to come in at this juncture. Liam Kerr. Just very briefly, if I may, you talk about the contract that was entered into for the release, I think that you said, of Mr Foley. At least in the early stages, that was styled as a redundancy. If there is a redundancy, there is a dismissal. If there is a dismissal, it is capable of being an unfair dismissal, and therefore there is a risk and there is a risk of some kickback, an absent, a settlement agreement. In such circumstances, I would struggle to recall an employer who would not have at least considered a settlement agreement. So, who took the decision not to use a settlement agreement and why? I can confirm this as part of providing a detailed timeline to the committee. My understanding is that there were some informal discussions with the Government about whether or not a settlement agreement would be something that we would be likely to support, because you will be aware that individual settlement agreements must come to ministers for comment. You say that individual discussions with Government ministers, I think? No, the discussions would have taken place with officials in the teams for which I have responsibility as part of their on-going, regular engagement with the Scottish Police Authority, but I am aware of the fact that discussions took place about whether or not a settlement agreement would be something that the Government would support. We were not inclined to support a settlement agreement. Are you able to tell me why? I am absolutely mindful of concerns that have been raised by the committee and by the need to ensure proper and effective use of public money in all cases. I will always be looking very carefully at any proposal to pay money that perhaps goes beyond what an individual is entitled to receive. Forgive me, because the settlement agreement simply embodies the deal that is made and the deal that was struck. There is a payment in lieu of notice, of course, which would be a contractual payment, but then there is this early retirement payment, at least some element at which, and we will find out next year, will be non-contractual. It would be some kind of exgrassia one would have thought. I just do not understand why you would not put the settlement agreement in place to protect the employer. My understanding of that is that the payments that are being made are consistent with the requirements of the agreed severance scheme that is in place. There are a number of individuals who depart from SPA from Police Scotland and do so on a consistent basis. That is on the basis of the approved severance scheme without any settlement agreement. I certainly, having considered that earlier, could not see why there would be a need for a specific settlement agreement in this case and that, rather, the scheme itself already approved was the scheme that should operate. I have had no indication from other members of questions. Mr Coffey. I wonder if I could just ask some questions relating to the paper that we have got in front of us today, and maybe I will also get a chance to bring Mr Gray into the discussion, who has been sitting very patiently and has not been able to contribute. Just to ask firstly Paul, what is the Scottish Government's actual role in the whole management and monitoring of all these various arrangements? What is your specific role? The role includes consultation on any proposed settlement agreement, and then, importantly, it involves reporting to this Parliament. That is a fundamental aspect of the Government's role. We are both consulted on any proposed agreement, and we will consider a range of issues as part of that consultation, such as whether there should be a confidentiality clause, such as whether we think that value for money would be achieved in the settlement agreement, and then we will report to Parliament. There is also a responsibility for ministers in relation to the overall policy framework, in relation to severance and settlement agreements, and, as the committee is aware, a consultation took place earlier in the year on those issues. The breadth of those arrangements throughout the public sector and elsewhere, a lot of those arrangements have been in place. Has anything particularly changed about those arrangements in this session of the Parliament that you are familiar with? It used to be the case that confidentiality clauses were arranged so that it was not even possible to disclose the fact that a settlement agreement had been entered into. In other words, you would neither confirm nor deny that such an agreement had been entered into. A predecessor to this committee made very strong representations that they thought that was inappropriate in terms of use of public funds. We agreed and removed that particular form of settlement agreement. I know that members have expressed differing views on the matter, but it was the case that, in the NHS, when I came into the role of 148 settlement agreements, 147 had included confidentiality clauses. There was concern, both through this committee and in Parliament and in public discourse, that, somehow, those confidentiality agreements were either inhibiting people who may have concerns from raising them. As Paul Johnson has said, no confidentiality agreement or clause can stop someone making a public interest disclosure. However, Mr Neil, as then Cabinet Secretary for Health, concluded that the best approach was to remove the presumption in favour. All health service settlement agreements draft up to that point included a confidentiality clause. It was there automatically. We removed the automatic inclusion. A draft clause is available if it is required, similarly a draft derogatory statements clause. However, those are matters for negotiation, they are not automatically included. There have been some changes as a result of the interventions of the Parliament and the views of ministers. The direction of change has been towards more openness, accountability, scrutiny and so on. As I know, colleagues do firmly subscribe to the view that the expenditure of public funds must be transparent. The last point is that there are some tables in the report that show some figures across various sectors, and NHS is in there as well. Is there any particular stand-out nature in your unusually high-low-breaking trends? It is hard for us as an audit committee to see if there is anything significant about this, or is this part and parcel of what happens within a service the size of the NHS? In a service in the size of the national health service, employing over 150,000 staff, to have 36 settlement agreements in a year would not be regarded as a disproportionate use of that approach. Most of the many of those relate to relatively junior members of staff, and I think the points that are made—the committee has the report, so I won't read them out—but the points that are made in paragraphs 5 through 8 are important in defining the areas in which a settlement agreement might be used. Quite often it is used because the costs of pursuing other approaches would be higher, so in fact it reduces the costs to the public purse. That would be the normal basis on value for money terms where you would take this approach. I thank both the witnesses for coming along this morning, Mr Johnson and Mr Gray, for your evidence, and I will now move the committee into private session.