Water regulator insists change of culture underway after lavish spending

The water industry regulator at the centre of a public spending scandal insists progress is being made in changing the culture of the organisation.

A report published earlier this week found further evidence of “inappropriate spending” at the Water Industry Commission for Scotland (Wics).

Audit Scotland’s latest report on the organisation found almost £75,000 of expenditure did not meet public spending rules and £20,000 did not represent value for money.

However, auditors were reassured that none of this took place after December 2023, when they first raised the alarm about Wics – prompting former chief executive Alan Sutherland to stand down.

Wics has come under intense scrutiny since lavish spending at the regulator was uncovered last year.

This included a £400 restaurant meal which Mr Sutherland claimed for on expenses with no receipt, and management courses for senior staff costing in excess of £70,000.

Ronnie Hinds, interim chairman of Wics, said: “Audit Scotland’s report recognises the progress made by Wics since the auditor general’s 2022/23 audit was published last year.

“There were no instances of non-compliant expenditure in the period since last year’s section 22 report, and we welcome the auditor general’s recognition of the significant work underway to improve leadership, governance and culture within the organisation.

“This reflects the action Wics has taken to address previously identified weaknesses in governance and financial control and indicates that progress is being made as we continue to undertake organisational change.

“Everyone at Wics remains fully focused on fulfilling our crucial role as the economic regulator of Scottish Water on behalf of the people of Scotland.”

The latest Audit Scotland report also confirmed Mr Sutherland’s departure cost the public purse £105,488 as he was paid six months’ salary and legal fees were incurred.

Officials have previously told MSPs there was no “gross misconduct” during his tenure and therefore he was not dismissed.

As well as Audit Scotland, the Scottish Government carried out its own review of Wics’ spending.

This found the former chief executive claimed for a number of items which had “no clear business purpose”, including a £170 Mulberry wallet and glasses worth £290.

The organisation has 26 staff and had an income of about £5.3m last year.

The Conservatives have said the “eye-watering” spending at Wics should have been reigned in far sooner.