Chamber and committees

I know that others will want to come in, and we have lots of questions for you today. First, however, I will say that I spent two years on the Scottish Parliament’s Criminal Justice Committee and I know that, although the majority of stakeholders in the courts and in the prisons whom the committee met when we visited those places in person spoke very highly of the individuals who work in your organisation—it is important to put that on the record—they had very few positive comments to make about the company in general.

To go back to my first question, GEOAmey is an experienced organisation in the public sector, with large contracts in other jurisdictions, so why on earth did you go into a contract that was so tight that it did not allow you the flexibility to change the contract terms or operating model as the environment that you worked in changed? Clearly, it has changed substantially—in your view, it has changed more than it should have, according to the contract that you went into. You must employ some pretty decent solicitors to help with the contract wording and commercial negotiations, so why does the contract not allow for those substantial changes in the environment that you work in?

Can you say what the Government will do to support people in the scenario that I have outlined? I do not know the answer to that question.

Good morning, gentlemen. Thank you for your frank opening statement, Mr Jones—we do not often hear one of those in committees. However, having said that, I want to ask you the following. You have just repeated the phrase that you treat the Auditor General’s report as “balanced and accurate”. The report’s opening gambit is that

“The ongoing poor performance of the contract is resulting in delays and inefficiencies across the justice sector, impacting on policing, prison services and the courts.”

Is that a balanced and accurate description of your operating performance?

The contract said that you needed between 650 and 700 officers but, at the lowest point, you had only 510, so of course that will put pressure on your ability to deliver services. That is not anyone else’s fault but your own.

It sounds as if you have unfortunately found yourself in a perfect storm.

Of course, the obvious solution to that is to improve the package that you offer your staff. Retention would surely improve off the back of that, although that might come at a cost to your profit margin. Do you get the impression that you have bitten off more than you can chew with this contract here in Scotland?

Well, business class—£5,000 to fly to Boston is quite a lot of money, I would say. However, that is by the by. My wider point is that there is a clear inherent conflict of interest between the work that people are doing on the ground and them forgetting that the cards that they are using are using public money. That is where some conflicts have to be resolved.

Having listened to the evidence, I have a wider issue. I read the commission’s annual report—all 75 pages of it—and, on page 30, it states, in black and white, that

“There have been no governance issues identified during the year that are significant in relation to our overall governance framework.”

If that was the case, why did the Auditor General say:

“The Commission demonstrated poor governance over the approval of expenditure, including insufficient engagement with its Scottish Government sponsor division”?

As we have heard, there was a wide-ranging Pandora’s box of failures in governance.

My problem is that the report says that there were no issues with your internal audit processes, and indeed, your external audit processes—bearing in mind that you pay quite a lot of money to Grant Thornton UK LLP to do some of that work, which begs the question of what role it had in all this—but Audit Scotland and the Auditor General stepped in to say, “Hold on, something smells wrong.” What went so catastrophically wrong for the board to have missed all those governance issues?

But that is one of the four key accountability metrics that you as a board have to sign off. You signed off all four of them. Value for money is one, but there are others, including effective and robust internal controls and high standards of propriety in behaviour—there is a whole list of things that you have to sign off in the annual report. You signed them off and it is there in black and white. It says:

“There have been no governance issues identified”.

If there were no issues, why did the Auditor General produce a section 22 report that said that there were issues? What did you—

You held 10 meetings in the year that I referred to—five formal and five informal. Are you saying that no issues of culture around senior directors and the chief executive arose in those meetings?

It sounds as if you have work to do on your internal audit, though. If the issue was picked up only by the external audit, surely you need to have a conversation with your internal auditors.