The University of Aberdeen has been ordered to repay more than ?100,000 of taxpayers’ money after a review found it had broken financial rules by authorising additional payments worth ?349,000 relating to its retiring former principal.
In a damning report??on 19 February, the Scottish Funding Council (SFC) says that Aberdeen had breached financial memorandum requirements in its handling of the departure of Sir Ian Diamond, who retired as principal in July 2018. He was appointed the UK’s national statistician in October 2019 and heads the UK National Statistics Authority.
The payments were disclosed in the university’s 2017-18 accounts, a period in which Sir Ian's total remuneration came in at ?601,000.? Aberdeen said that Sir Ian was entitled to a sum of ?289,000 because it was a “contractual notice period payment and related expenses” on top of his ?282,000 salary and ?30,000 in employer pension contributions.?In addition, the SFC found that a ?60,000 payment to a third party in relation to Sir Ian was not declared, despite it being a “benefit in kind”. The figure of ?349,000 is the total of the lump ?289,000 sum plus the ?60,000 third-party payment.
But the SFC?queried?the payment for Sir Ian’s “gardening leave” and, following a review, has now ruled that the university approved the settlement without making a value-for-money assessment and could have identified better alternatives.
It also identified “flaws” in the conduct of Aberdeen’s remuneration committee, which considered the payment. The committee meeting was held without staff or student representation on a Saturday morning in July 2017, having been called the previous evening.
There was also no evidence that the committee had communicated its decision to the university’s governing body, the report also says.
While Sir Ian – who led a 2011 Universities UK?inquiry?into efficiency and value for money – was described as being on “gardening leave” for 12 months from August 2018 and “was available to provide support to the university if required”, there was no evidence that any advice was ever sought, the report said.
Instead, the review found the “intention of the settlement agreement…was to provide a payment in order to secure his orderly departure from his position as principal”, noting that he had “significantly fewer duties and responsibilities than those constituting the full role of principal” in his final year of office.
It concluded that Aberdeen should repay ?119,000 to the SFC – about a third of the ?342,000 overall payment to Sir Ian – given that 34 per cent of Aberdeen’s funding comes from the Scottish government.
Richard Lochhead, Scotland’s higher education minister, said it was “clearly unacceptable that the University of Aberdeen did not meet its grant conditions, nor the highest standards of transparency that we expect of organisations which benefit from public funds”.
“I expect the university to take immediate action on the SFC’s recommendations,” he added,
Mr Lochhead added that the report finds that “payments were made to?[Sir Ian] without appropriate approvals and without documented assessment of value for money”.
“I do not believe the impact should be borne by the student or staff bodies and I therefore urge the university to consider whether it can recoup these funds,” he said.
Esther Roberton, a senior governor at Aberdeen, said the university “co-operated fully with this review, welcomes publication of the report, accepts its main findings and has already repaid the ?119,000 to the Scottish Funding Council”.
She added that “court – the university’s governing body – will reflect closely on the SFC’s suggestion that the university may wish to consider repaying additional monies or donating to a university learning-related activity, once it has had the opportunity to fully consider the report’s findings and their implications”.
Ms Roberton added that the university had appointed an interim university secretary to undertake an internal review of governance and implement any recommendations from the SFC report.
