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Junket Scotland

SUNDAY HERALD INVESTIGATION: By Paul Hutcheon and Tom Gordon

BUSINESSES are providing lavish junkets to little-known but highly-influential staff across swathes of the public sector, a Sunday Herald investigation can reveal.

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Senior managers in councils, health boards and quangos are routinely accepting invitations to sporting events, concerts and dinner from firms interested in securing public contracts and money.

Even Audit Scotland, the body responsible for policing the public sector, was found to have accepted a number of foreign jaunts, with staff going on extended trips to the Swiss Alps and Uganda, and frequent visits to Dublin, Paris, Jordan and Moldova.

With recession looming and unemployment soaring, ordinary families across Scotland are tightening their belts and preparing for an economic downturn.

However, hospitality registers obtained under Freedom of Information legislation from Scotland's public bodies suggest the good times always seem to roll for those in the right jobs.

Although there is no accusation of corruption, the registers point to an ingrained culture of accepting hospitality from big business and a lack of consistency between public agencies on how to deal with socialising between senior staff and contractors.

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COUNCILS With budgets totalling more than £12 billion, it is little wonder Scotland's 32 councils regularly receive invites to junkets from firms looking to win new business or extend existing deals.

However, despite accounting for almost 60% of spending, education and social work departments feature little on the hospitality registers, as most of the money is absorbed in staff wages.

Instead, corporate largesse is directed overwhelmingly at senior officials with influence over capital spending, PPP/PFI deals, planning and the management of pension funds.

Up and down the country, well-paid heads of finance, legal, planning, property and IT departments on councils receive the dinners, lunches, golf invitations and tickets to rugby and football matches, rather than the teachers and social workers on the frontline.

In Glasgow, senior officials are regularly entertained by companies with whom the authority does business.

After the council agreed a £265 million partnership with Serco to run the council's property and IT services last December, invitations flew in to the chief executive's department for the "Serco Solutions Burns supper", a Serco drinks reception, dinner and drinks with Serco at Glasgow's award-winning Chardon d'Or restaurant, and a Serco party to mark the deal being signed in February.

Other generous hosts include Capgemini, consultants working with the council on procurement and council tax systems, who took senior staff to dinner at Chardon d'Or twice in one week earlier this year. In 2006, the company also handed over tickets to the chief executive's department for an Old Firm game.

Across the central belt, officials at City of Edinburgh Council in charge of the £3bn Lothian pension fund receive regular hospitality from would-be fund managers and accountants.

In the last two years, the director of finance has received dinner invitations from Baillie Gifford, Henderson Global Investors, Oppenheimar Capital, Goldman Sachs and Oracle.

In March this year, one dinner and whisky tasting at the Abstract restaurant in Inverness ran to £300, courtesy of Henderson Global, which ran the fund's bond portfolio until 2007.

The council's head of financial services has also been wined and dined recently by KPMG, Baillie Gifford, Henderson Global, Butlers, and Zurich Municipal.

After East Ayrshire council signed a deal worth £329m over 30 years to build and run seven schools under PPP/PFI in 2005, their staff also got the pampering treatment from the firms whose performance they would need to monitor.

In September 2006, Burness LLP and Atkins, the legal advisers on the deal, took several members of the PPP team to a day of "corporate hospitality" at the Ayr Gold Cup.

The same month, another council official was whisked off to Munich by Hotchieff Construction, which was building the schools, for a two-day briefing on the contract.

To mark the "financial close" of the PPP contract, Nord LB threw a thank-you event for council staff at Chardon d'Or in January 2007.

Those attending included Fiona Lees, the council chief executive, who has also been a regular recipient of hospitality from the drinks giant Diageo, a local employer.

In four of the past five years, she accepted hospitality for herself and her partner at the Johnnie Walker Championship at Gleneagles "to recognise Diageo".

Last year's recognition exercise involved picking up two bottles of Johnnie Walker Black Label, two vouchers for a free round of golf and a pair of jackets.

Golf is one of the most popular junkets across councils. This year, IT staff in East Lothian have taken up invitations to play at Dalmahoy from Instalec, at Turnberry from Computacenter, and at Gleneagles from Hewlett-Packard.

Last year they managed the same three trips plus a round at Turnberry courtesy of Esteem Systems and six tee times at Duddingston from Cablecom.

In neighbouring Midlothian, Stephen Crawford, the head of property services, hit the fairways with two major contractors with the authority.

Last year, after being their guest at Musselburgh Racecourse in the spring, he went golfing with Hart Builders at Carnoustie in July.

This year he accepted a ticket to the sell-out England v Scotland rugby match at Murrayfield from the company, as did Neil Davidson, the council's principal architect.

Hart is currently working with the council on a £109m programme to build 1000 new homes for rent in Midlothian.

The developers Hardies also took Crawford golfing twice last year, including a trip to St Andrews, and dined him at the Eskbank restaurant run by Gerry Goldwyre, former winner of BBC MasterChef.

In June this year, they took him golfing again, to the Muckhart Club near Dollar.

Last month, Midlothian appointed Hardies as the project managers and quantity surveyors on a £25m project to build three new primary schools.

HEALTH BOARDS Scotland's 14 NHS boards spend £7 billion a year, a budget used for staff pay and drugs for patients. With such a large pot available, pharmaceutical companies are naturally anxious to get close to NHS decision-makers.

NHS Highland's hospitality register records that numerous foreign trips for doctors have been paid for by the drugs industry.

Urology specialist Ian Wilson attended the American Urological annual meeting in Texas three years ago, with drug firm Glaxosmithkline picking up the tab.

Dr Sandra MacRury, a consultant diabetologist, visited a conference in the same year thanks to Eli Lilly, one of the world's largest drugs manufacturers for the condition.

Consultant rheumatologist Dr John Harvie is listed as having attended a health conference in Barcelona last year, the costs of which were met by Pfizer, a drug firm that markets products in this area of medicine. Dr Andrew Hay of Raigmore hospital in Inverness attended a congress in Nice paid for by Astra Zeneca, another pharmaceutical company.

A spokesperson for NHS Highland said: "The acceptance of hospitality from suppliers is extremely limited and staff attending events check these with senior managers and log them in the register to ensure transparency."

According to NHS Grampian's gift register, the biggest recipient of hospitality in the last four years has been Gerry Donald, the body's head of physical planning. In 2005, Donald received dinner at the plush Marcliffe Hotel from Stewart Milne Construction, as well as an invitation to a student charity show.

In the same year, TCD Architects took him to an Aberdeen FC match, while property consultants Rydens provided dinner at the Marcliffe.

Donald received two dinner offers from Stewart Milne in 2006, the year the company bought a site owned by NHS Grampian for £16 million.

Other hospitality offered to this one NHS Grampian employee included an invitation for him and his family to a barbeque by Robertson Construction Ltd and several dinners by engineering consultancy Mott Macdonald.

A spokesman for NHS Grampian said: "Hospitality is widely accepted as an integral part of conducting business. We recognise the importance of recording all such contact and in NHS Grampian we remain scrupulous about maintaining our hospitality register, which is a public document."

QUANGOS Some of the most striking invitations have been to the Scottish Environment Protection Agency (SEPA), where the chair and chief executive were regular guests of potential polluters, including oil, chemical, nuclear and water companies.

Between 2000 and June 2002, then then chief executive, Tricia Henton, had three dinners with the Chemical Industries Association (CIA), two dinners with Scottish Coal, two Burns Suppers with ExxonMobil, two dinners with Water UK, the body representing the country's water and waste water companies, a whisky reception with Philips Petroleum, dinner and concert tickets from Shell UK, dinner with Thames Water, dinner with BP Grangemouth, and two dinners, a lunch, a drinks reception and ballet tickets from British Energy, which runs the UK's nuclear power stations.

In 2003, British Energy was fined £15,000 after admitting the release of 60 cubic metres of liquid radioactive waste from its Torness plant in East Lothian.

In the same year, Scottish Coal was fined £5000 for discharging contaminated water in Ayrshire, and in 2005 it was further fined £2000 for allowing heavy fuel oil into a burn, also in Ayrshire.

In 2001, Sir Ken Collins, Sepa's chairman, had three dinners with United Distillers - later known as Diageo - after the quango agreed on the discharge of trade effluent into the Beauly Firth.

Between 2002 and 2005, he was dined once by the CIA and British Energy, twice by Water UK and twice by Scottish Water, on one occasion at Cromlix House, a five-star hotel in Stirlingshire.

A busy year, 2006 saw Sir Ken at an ExxonMobil Burns Supper at a castle in Fife, at dinner with the CEO of Shanks, which runs a number of landfill sites, dinner at Glasgow's Rogano with Scottish Water, and at a table at the CBI Scotland dinner with British Energy.

In 2007, Sir Ken took another dinner with Shanks, a tour of Diageo's Cameronbridge Distillery, and yet another dinner at Rogano with Scottish Water.

According to Sepa's own website, Scottish Water has been fined at least 33 times since 2002 for the pollution of rivers and burns, including the discharge of sewage and toxic chemicals.

In 2005, Diageo was fined £10,000 for polluting the tributary of a salmon river near its Muir of Ord distillery with heavy fuel oil.

David Sigsworth, who succeeded Sir Ken as chair, had dinner with Shell at Edinburgh's Bonham Hotel within a fortnight of taking over in January this year.

Scottish Enterprise (SE), the jobs quango, is another public body that appears to preside over a junket culture, with over 130 items of hospitality listed in its register.

It is natural for a business-growth organisation to hold regular meetings with a variety of firms, but the quango must also be aware that the same companies may want a share of £500m pot SE spends every year.

For instance, Scottish Enterprise Glasgow announced in 2007 that it was providing £25m to fund a new 12,500-seater arena on the site of the SECC.

SE's hospitality register shows that Lena Wilson, the national organisation's chief operating officer, had previously received concert tickets for Billy Joel and George Michael performances from a top arena official.

After the funding was announced, Wilson received a further invitation to comedian Ricky Gervais's show from the SECC.

The register also reveals SE chief executive Jack Perry received an Open Golf freebie from Hewlett Packard, an invitation to the Edinburgh Festival opening concert from Scottish & Newcastle and a ticket for a Rod Stewart concert from Ernst & Young.

Aileen Graham, another SE employee, according to the register, received two separate invitations from legal firm Maclay Murray and Spens to an evening with Jo Malone, a beauty expert.

Other junkets include 11 SE human resources staff receiving an invitation to a "yacht sail" by car dealer Arnold Clark, a trip to the Perrier Awards for one of the quango's bosses and a day out at the Hamilton races.

A spokesperson from Scottish Enterprise said: "We have a very clear code of conduct for staff accepting gifts and and hospitality and in both of these cases, all of our criteria were met.

THE WATCHDOG The body in charge of public spending and delivering best value for taxpayers north of the border is Audit Scotland. But scrutiny of its hospitality register shows that it too has accepted many invitations from companies.

Although the watchdog's remit is to "make sure organisations that spend public money in Scotland use it properly, efficiently and effectively", hundreds of precious man hours since 2005 have been spent at overseas events.

Members of the management team have enjoyed publicly-funded trips to Seville, Toulouse and Dublin, as well as other jaunts to Copenhagen and Amsterdam.

Bob Black, the Auditor General for Scotland and the most important figure at Audit Scotland, last year embarked on an eight-day trip to Crans Montana in Switzerland, a luxury ski resort, where he chaired a pan-European audit conference.

Most of the foreign trips for senior staff were paid for by Audit Scotland - in other words, the taxpayer - with the Swedish National Audit Office paying for one event and Eurorai, a "co-operation project" for European watchdogs, picking up the tab for the Swiss outing.

The same register shows how other Audit Scotland staff benefited from another 40-plus foreign trips in the last four years, many funded internally or by external audit agencies such as Whitehall's National Audit Office.

Examples of international trips include: a week-long adventure to Vilnius for a "twinning project"; a trip to Paris to "peer review" the Lithuanian Audit Office; another visit to the French capital to review the Bulgarian equivalent of their own organisation; and an eight-day jaunt to Poland to attend an audit conference.

These journeys were on top of 10 separate visits to Jordan to provide "financial audit training", a three-day "business continuity" conference in Amsterdam, and a 15-day trip to Uganda to pick up tips on local government.

An Audit Scotland staffer also accepted a five-day trip to the Bangladeshi civil service women's forum to talk about female representation in public life.

Alex Neil, SNP MSP for Central Scotland, said the public sector junket culture must end: "I think we should consider a zero-tolerance approach to gifts and hospitality. Nobody should be accepting this sort of hospitality, particularly those people whose job will entail helping companies financially."

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