PAC finds widespread responsibility for WICS’ governance failures

The Scottish Parliament’s Public Accounts Committee (PAC) has found widespread responsibility for the financial management, governance and behavioural weaknesses identified at the Water Industry Commission for Scotland (WICS).

In its final report on WICS, following scrutiny initiated in December 2023 by a Section 22 report from the Auditor General and subsequent examination of the regulator’s 2022/23 and 2023/24 audits, the PAC concluded “that not one individual or body is responsible for the catalogue of failures that occurred at WICS. It is clear that the WICS board and Audit and Risk Committee, along with the Scottish Government and the former chief executive, all failed to meet the standards required of them and contributed to an unacceptable use of public funds.”

The Committee agreed with the concerns previously raised, notably around value for money in the use of public funds, concluding: “WICS has failed to lead by example in respect of ensuring value for money, as evidenced by the significant weaknesses in its governance and financial management arrangements.”

However, throughout its report – in its observations, recommendations and conclusions – the PAC pointed to improvements and remedies made to date at WICS, and called for lessons to be learned for public bodies more widely rather than for punitive action at the regulator. It welcomed the Auditor General for Scotland’s intention to track and monitor progress, with a view to further public reporting if necessary.

Ronnie Hinds, interim chair of WICS said: “We accept the PAC’s report in full. It reflects issues that we have acknowledged and have been actively addressing since December 2023. With direction from our board and through the commitment of our leadership team and staff, we have taken decisive action to strengthen governance, improve financial controls and embed a culture that is firmly focused on best value. We welcome the Committee’s recognition of the steps WICS has already taken, and we are committed to continuing this momentum.

“Everyone at WICS continues to be fully focused on regaining trust and reaffirming our role as an economic regulator that upholds the highest standards, both in our regulatory approach and in our stewardship of public resources.”