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WICS review confirms problems and acknowledges progress

by Karma Loveday

The Scottish Government (SG) review of the Water Industry Commission for Scotland (WICS) has confirmed the weaknesses in governance and financial management flagged up initially by the December 2023 Section 22 report on WICS’ 2022-23 Annual Report and Accounts, and subsequently by internal reviews. However, it also recognised the efforts made since by WICS and the SG itself to improve the situation, and made further recommendations for change.


Three reports were published:

  • Independent review of financial transactions – conducted by consultancy EY, this did not identify any risks or themes not highlighted by previous reviews but found “multiple transactions which demonstrate weaknesses in governance and control and point to patterns of behaviour identified by previous reviews”. For instance: “Our review of transactions identified multiple instances where expenses were incurred with no discernible business purpose.”


  • Independent review of governance and culture – this centred on governance, leadership and culture, and was conducted while WICS remained “in a state of reset”. It endorsed changes made so far but argued for more. For instance, the review said: “Refreshing policies and procedures alone will not be sufficient to place the organisation on a firm footing to move safely forward. Of greater importance will be a reset in the ‘tone from the top’ and getting the basics right. This will include ensuring the organisation has the appropriate structure, capability and capacity to deliver its statutory functions and that roles and responsibilities at all levels are understood and policies are complied with.” On culture, the review urged that WICS foster a “culture where it is safe to challenge, staff views are heard and issues of non-compliance are identified and acted upon”. It found this had not been the case in the past.


  • Review of the SG’s sponsorship of WICS – this made two high and two medium priority recommendations after identifying “weaknesses in the current risk, governance and/or control procedures that either do, or could, affect the delivery of any related objectives”. Again it acknowledged improvements underway. 


Ronnie Hinds, interim chair of WICS, said: “We fully accept the findings and recommendations of the SG report published today. This review reflects our own recognition of weaknesses in governance and financial control within the organisation in the past.


“We welcome the acknowledgement of the action WICS has taken to address these issues, and the significant progress made since the Auditor General for Scotland’s Section 22 report was published last year.  We are now committed to accelerating organisational and cultural change and building upon the meaningful progress made to date.”

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