SFC on defensive after college payout ‘scandal’

30th January 2015 at 00:00
Politicians call for review of funding council’s role as principal is asked to return some of severance payment

The Scottish Funding Council continues to play an important role in helping colleges to prove their worth to students and employers, its chief executive has claimed, following heavy criticism of the body over the size of a college principal’s severance package.

Laurence Howells hit back at accusations that his organisation was not fit for purpose, but admitted that there were “lessons to be learned” from the affair.

MSPs called for a review of the Scottish Funding Council (SFC) after it emerged that the funding body had been unable to stop former Coatbridge College principal John Doyle from receiving over £300,000 in severance pay. Mr Doyle had left the college in the run-up to its merger with Cumbernauld and Motherwell colleges in 2013, creating New College Lanarkshire.

The payment had been “engineered through a process of misinformation and disregard for existing guidelines and process”, MSPs on the Scottish parliament’s public audit committee said in a report earlier this month.

Although he insisted in his evidence that he had done “nothing wrong”, the committee called on Mr Doyle to return some of the payout he received. It said that the SFC had communicated with those who had agreed Mr Doyle’s severance, but added that those people had chosen to act against the funding council’s advice.

The SFC should have reminded colleges of its guidance on severance payments to senior staff in the run-up to the regionalisation process, which began in 2012, the report said. The committee said: “Had it done so, the governance failures seen here may have been prevented . Failure to reissue the guidance as the merger process began across Scotland was a failure of duty by the SFC.

“Given the significant governance and oversight failings that have come to light through our inquiry, the Scottish government must look again at the operation of the Scottish Funding Council and the effectiveness of its supervisory role.”

‘Lessons to be learned’

Mr Howells said that at the time of the payment to Mr Doyle, settlement and severance had both been for colleges to decide, although he added that institutions were “expected to follow SFC guidance”.

“We raised concerns about the college’s severance terms and reinforced our guidance very clearly on several occasions. This included attending a college board meeting and calling in the college’s principal, chair and finance director,” he said.

However, Mr Howells added: “We accept that, as outlined in the [committee’s] report, there are lessons to be learned for SFC and we will take these on board.”

The chief executive also said that the SFC had recently led a very significant programme of change in the college sector in difficult times, and had very strong and healthy links with colleges “at all levels of their operation”. Tavish Scott, a Liberal Democrat MSP and a member of the public audit committee, said: “The SFC’s role is to provide support, guidance and merger advice to Scotland’s colleges. The public do not understand huge, unjustified golden goodbyes for very well paid public officials and the SFC’s role in these settlements needs to be questioned by Scottish ministers. So far ministers have kept their heads well below the parapet over such use of public money.”


The Coatbridge timeline

2012: Coatbridge College approaches the Scottish Funding Council, suggesting a merger of all four Lanarkshire colleges.

January 2013: Cumbernauld and Motherwell colleges announce their intention to merge to form New College Lanarkshire.

24 January 2013: The SFC writes to the chair of Coatbridge College to highlight the need to adhere to severance payment frameworks.

February 2013: Coatbridge announces that it will join the merger, but withdraws weeks later.

August 2013: Coatbridge College rejoins the merger process and becomes a member of New College Lanarkshire on 1 April 2014.

October 2013: The SFC repeatedly writes to Coatbridge chair John Gray, seeking reassurances that guidance will be adhered to.

23 October 2013: Laurence Howells, SFC chief executive, attends Coatbridge management board meeting, raising concerns on severance.

31 October 2013: Principal John Doyle leaves with a severance payment of £304,254. Chair John Gray also leaves the college.

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