Fat cat water boss pocketed six months' salary after lavish spending scandal

The decision by the Water Industry Commission for Scotland as been criticised by the Government.

The former CEO of Scotland’s water regulator received six months’ pay after it was deemed lavish spending at the body did not represent “gross misconduct”.

Alan Sutherland stood down from his position at the Water Industry Commission for Scotland (Wics) in December last year following the revelations about spending.

These were exposed in an Audit Scotland report and included meals claimed on expenses and a near £80,000 Harvard training course for a senior manager.

But despite criticism, Sutherland reached a deal with the body’s board which saw him leave immediately while still receiving six months’ salary in lieu of notice.

The move was heavily criticised by the SNP Government, with then Net Zero Secretary Mairi McAllan saying in a terse letter earlier this year his departure did not follow Government rules.

She also accused the body of failing “to follow due process”.

In a sometimes tense appearance before the Public Audit Committee on Thursday, Donald MacRae, chairman of the Wics board, said: “There was no gross misconduct.

“You could have dismissal without gross misconduct, but that would have meant payment of 12 months’ salary, which would have been considerably more than what we actually agreed, so that’s why that option, in value for money terms, was twice as expensive as the one that we chose.”

Under questioning from Tory MSP Jamie Greene, MacRae said the board discussed if there had been gross misconduct on Sutherland’s part and took legal advice, eventually reaching the decision there had not.

According to the body’s annual report for 2022-23, his gross salary was between £165,000 and £170,000.

Greene asked: “Would spending tens of thousands of pounds on a corporate credit card on lavish meals, first class travel, fine wines, having no accountability and seeking no approval, (which is) then highlighted in a fairly damning Audit Scotland report, those aren’t grounds for dismissal?”

MacRae responded there was “no evidence of gross misconduct”.

Pushed by Tory MSP Graeme Simpson on whether Mr Sutherland did anything wrong that would have caused him to leave Wics, MacRae said: “No-one has a perfect record, including myself.

“I’m quite sure that everybody will have done something at some point.

“I accept that he did very well in many areas of economic regulation, but there were certainly areas – particularly around the culture – where there were question marks, in particular how he would react to making the change after the (Audit Scotland report).”

He added that there was no conversation with Mr Sutherland where senior staff pushed him to resign.

MacRae insisted a previous senior Scottish Government official had cleared the payment, claiming he said “we can do this” in a phone call.

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But acting Net Zero Secretary Gillian Martin told MSPs in the Holyrood chamber later on Wednesday that the Scottish Government was only made aware of the payment on January 12 – weeks after Mr Sutherland had stepped down.

The interim director-general for net zero in the Scottish Government, Michelle Quinn, speaking in the same committee hearing, added that Wics had sought “retrospective” agreement for the payment to Ms Sutherland.

The Scottish Government is currently undertaking a review of Wics, but has not announced a date for the report to be released.

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