HIE

Willy Roe is chairman of both HIE and consultancy firm Rocket Science

The chairman of Highlands and Islands Enterprise (HIE) has resigned from a consultancy firm at the centre of controversy over contract awards.

William Roe chairs both HIE and Rocket Science UK, which was awarded £150,000 of contracts by the enterprise body.

An internal review into the contracts was ordered by HIE chief executive Sandy Cumming.

It found “no evidence” of wrongdoing, but Mr Roe said he would be stepping down from Rocket Science.

The review carried out by HIE’s head of internal audit found its payments to Rocket Science between 1 September 2004 and 31 March 2009 totalled £149,256 for 21 projects.

However, the consultants subsequently repaid £6,864 after it was discovered that material in one report had been copied without clear attribution from another source.

Willy Roe is a hugely imaginative and inspiring public leader who is devoting his talent to creating a better Scotland Richard Scothorne Rocket Science

The report said 12 of the projects, which totalled £117,516 of expenditure, were either awarded after a tender, or had appropriate justification for using Rocket Science recorded at the time of the decision.

It added that a further expenditure of £31,740 had no advance justification recorded, but all of these contracts were for less than £10,000 and were therefore in line with HIE’s policy for awarding negotiated contracts.

The audit found no evidence that any of HIE’s decisions to use Rocket Science had been influenced by Mr Roe’s role in either body.

In a statement released following the report’s publication, Mr Roe said he had decided to leave his post with Rocket Science in order to “completely separate my public service functions from my private business interests” and to “prevent any possible perception of a conflict of interest arising in the future”.

He added: “When I was appointed chair of HIE, I agreed with the chief executive of HIE and the managing director of Rocket Science UK Ltd that we should immediately put in place a protocol to manage potential conflicts of interest that would arise if HIE and Rocket Science were to continue to have contractual business relationships.

“Both parties agreed that such a protocol should be established, the effect of which would be that I, as chair of both bodies, would be completely excluded from any and all aspects of the business relationship between the parties. The protocol was established and has been in existence ever since.”

Internal audit

Mr Cumming said HIE would be putting in place a tough monitoring regime in the wake of the report, which would include require all negotiated contracts worth more than £10,000 to be signed off by the HIE chief executive.

He added: “This has been a detailed and rigorous investigation of a complex issue, carried out to the highest professional standards by HIE’s head of internal audit and compliance.

“HIE aspires to be an exemplar of best practice in all the things it does, and the procurement of consultancy and other contracts should be no exception.

“I am confident that the procedures which HIE is putting in place as a result of this review will address the areas of weakness in the present system and ensure greater clarity and accountability from now on.”

‘Sad news’

Rocket Science said its work with HIE had actually reduced significantly since Mr Roe took on his role as chairman of the enterprise body.

The work carried out for HIE last year accounted for less than 1% of the turnover of Rocket Science, it added.

Rocket Science managing director Richard Scothorne said: “It should be very clear from this that we have not received any kind of special treatment since Willy Roe’s appointment as chair of HIE.

“Willy Roe is a hugely imaginative and inspiring public leader who is devoting his talent to creating a better Scotland.

“His resignation is sad news for us, and we admire him for taking this lead in completely removing any scope for perceived conflict of interest by decisively separating his public responsibilities and private interests.”

Commenting after the internal audit into the role of Willy Roe and dual responsibilities as Chair of HIE and of Rocket Science, Mary Scanlon, Scottish Conservative MSP for the Highlands and Islands said:

“This report has highlighted the failure of Mr Roe to update his register of interests in HIE and his failure to include 7 of the 21 contracts awarded in the register.  The investigation has also uncovered the fact that a contract worth £42,348 was awarded to Mr Roe’s private company and not put out to tender.

Many IT companies across the Highlabnds and Islands have been excluded from tendering for HIE contracts due to the awarding of so many contracts to Rocket Science.  In the depths of a recession, even one of the contracts awarded to Rocket Science would have helped to keep a small business afloat.

This investigation has confirmed the HIE did not follow correct procurement procedures.

I am now asking the Scottish Government to ensure that these incorrect procurement procedures are not replicated in any other quangoes and to ensure that Chairmen and Board members are not given preferential treatment in the awarding of lucrative public sector contracts’.

The recommendation of ten separate courses of action by HIE, following this investigation, is confirmation of the failures inherent in their existing systems.

Finally, there is no doubt that we would not have seen any report into HIE’s procurement process had there not been pressure and serious concerns raised in the media as well as my request for Audit Scotland to intervene.     HIE were obviously content to continue their current protocols of not pursuing any best practice models of fairness, openness and accountability in the awarding of contracts’.