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UPDATE: Aberdeen University trustees being investigated over possible charity law breach related to Sir Ian Diamond payout

Sir Ian Diamond
Sir Ian Diamond

Aberdeen University trustees are being investigated by regulators who are seeking to establish whether they breached charity laws.

The Office of the Scottish Charity Regulator (OSCR) confirmed today it was expecting to soon conclude its inquiry into whether the trustees met “their legal duties to act in the interests of the charity and to act with the required level of care and diligence”.

OSCR’s probe into a six-figure payment to former Aberdeen University principal Sir Ian Diamond has been carried out at the same time as a review by the Scottish Funding Council (SFC).

Today, the SFC ordered Aberdeen University to repay £119,000 of its grant after concluding its investigation.

The Scottish Government agency has also told the ancient institution to “undertake an externally-facilitated review of its governance procedures and governance culture”.

The focus of our inquiry is whether in making the payments to Professor Diamond the university’s charity trustees met their legal duties to act in the interests of the charity.”

Asked for an update on the OSCR inquiry, a spokesman for the regulator said: “We have been coordinating our inquiry with the review carried out by the Scottish Funding Council.

“The focus of our inquiry is whether in making the payments to Professor Diamond the university’s charity trustees met their legal duties to act in the interests of the charity and to act with the required level of care and diligence.

“We expect to conclude our inquiry soon, and in doing so we will be taking into account the SFC’s findings.”

Several university trustees have left since the period under review.

Last June, The Press and Journal exclusively revealed that the SFC had launched an investigation into a payment to Sir Ian.

The review related to decisions to pay him a total remuneration disclosed for 2017/18 of £601,000, consisting of a salary of £282,000, pension contributions worth £30,000 and contractual notice period payment and related expenses of £289,000.

But despite Sir Ian announcing his plans to retire from the top job at Aberdeen University in August 2017, he only triggered the notice period and payment in July 2018 – the same month he officially stepped down from the prestigious post.

Sir Ian Diamond

Today’s report concludes that Aberdeen University did not fully comply with SFC’s terms and conditions of grant, and orders it to repay £119,000 to the SFC, and to undertake an externally-facilitated review of its governance procedures and governance culture.

Karen Watt, chief executive of SFC, said: “Following a thorough review of the approach taken by the University of Aberdeen to the payment made to its former principal, we have concluded that  several governance requirements were not met.

“As a result, we require the university to repay some of its grant and undertake an externally-facilitated review of its governance procedures and governance culture.”

The SFC added that while this report focused specifically on one university, it expects all the institutions it funds to be familiar with its requirements and that lessons can be learned from the case.

It is clearly unacceptable that the University of Aberdeen did not meet its grant conditions.”

Higher Education Minister Richard Lochhead said: “It is 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.

“The report finds that payments were made to Professor Diamond 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.”

Esther Roberton, who was elected in 2019 to the role of Senior Governor of the university, said: “The university has 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.

“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.

Aberdeen University

“Last year the university appointed an Interim university secretary to undertake an internal review of our governance, support the university in responding to the SFC review, and in implementing any recommendations from the report.

“This work will now be overseen by an external facilitator in line with the recommendations of the SFC report.   In addition, a small internal group is being created – comprising recently appointed court members and a staff representative, to review the specific issues raised by the report. Findings will go to the meeting of the university’s court in June.

“The SFC review reports on decisions made three years ago and, while we acknowledge the report findings, the university has moved on under the leadership of the new Principal, the new senior vice-principal, and myself as senior governor, just elected last year.

“We will address the issues raised in the report and take lessons from it. This should ensure we move forward with confidence to deliver our newly launched 20-year strategy for the benefit of Aberdeen, the north-east and beyond.”

This decision to force the university to review its procedures and pay money back should act as a warning shot for other universities and principals.”

Mary Senior, UCU Scotland official, said: “Universities have a duty to use the public money they receive properly.

“It’s galling for staff, at a time they are being forced to take strike action for fair pay, to see university principals receiving unwarranted and unjustifiable pay offs.

“The funding council has shown that what happened at Aberdeen was entirely unacceptable.

“This decision to force the university to review its procedures and pay money back should act as a warning shot for other universities and principals.”

North East Labour MSP Lewis Macdonald said: “This is a damning report. The fact that the University has been forced to re-pay £119,000 speaks to the seriousness with which the SFC views the matter.

“When it comes to public funds, value for money must always be paramount. Clearly, in this case, the SFC believe there was a failure to protect the public purse.

Labour MSP Lewis Macdonald

“The report raises several questions including why staff and student representatives were not consulted on the settlement agreement, and why an additional £60,000 payment was not declared on the university’s financial accounts.

“At a time when university staff are taking industrial action to protect their own pensions, the case for transparency on senior staff pay and benefits has never been stronger.”

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