SCOTLAND’S state-owned investment bank is to spend £175,000 on headhunters to help find a new boss after the last one resigned in mysterious cirumstances.

The £2billion Scottish National Investment Bank (SNIB) has hired a blue chip London-based firm to conduct an “executive search” to replace chief executive Eilidh Mactaggart, who quit abruptly in January after just 18 months in post.

The six-month contract with Spencer Stuart, which was awarded without a standard competitive bidding process, also covers the recruitment of a chief investment officer. 

The Bank said it was “value for money”, but opposition parties last night questioned the use of so much taxpayers' cash. 

The bank was recently criticised for paying Ms Mactaggart £117,500, half her £235,000 salary, in leave of six months’ notice after she resigned, allowing her free to work elsewhere.

SNIB chair Willie Watt then refused to tell MSPs why Ms Mactaggart had left beyond saying it was for "personal reasons".

He was also questioned about finding her replacement, telling Holyrood’s Economy and Fair Work Committee in March the SNIB planned to use “external search consultants”.

He told MSPs "value for money will certainly be a very important criterion in that selection” of headhunters.

Despite Ms Mactaggart quitting on January 27, the public notification of the contract said it had been struck with “extreme urgency” and “brought about by events unforeseeable”.

It said: “For reasons we could not have foreseen we are in a position where we must recruit senior positions within the Bank. The time limits for open procedure, restricted procedure or competitive procedure with negotiation cannot be complied with for these specific positions.

“We have a contract in place with a Recruitment company for general recruitment purposes but that does not extend to an Executive search.”

A worldwide firm specialising in “leadership consulting”, Spencer Stuart offers a five-stage executive search process covering client priorities, long and short-listing of candidates, interviewing, background checks, salary negotiation and follow-up work.. 

The contract runs from April to September, meaning the new full-time CEO may not be in post until spring 2023, more than a year after Ms Mactaggart resigned.

Chief financial officer Sarah Roughead is currently acting CEO.

The SNIB, which went live in November 2020, uses public seed money to support green jobs as the country makes a just transition to a net zero economy. The Scottish Government has said it will provide £2bn of capital to invest over a decade. 

Tory MSP Liz Smith said: “The problems with Scottish National Investment Bank appear never-ending, following the shock - and costly - departure of its CEO.

“These exorbitant fees paid to head-hunters to find her replacement are hard to justify, given such a high-profile and lucrative post ought to attract high-calibre candidates easily enough.

“Eighteen months on from its launch by the SNP, the taxpayer continues to pay a hefty price for the crisis-ridden SNIB.”

Scottish Liberal Democrat MSP Willie Rennie said: "The Scottish National Investment Bank was supposed to boost Scottish business but it looks like the business doing best so far are the headhunters in charge of recruiting senior staff.

"Leadership is obviously hugely important in a body which is set to oversee up to £2bn of taxpayers' money, especially in the wake of the resignation of Eilidh Mactaggart. 

“Many previous Scottish Government economic initiatives have fallen apart at the seams, we cannot afford for this one to go the same way.

"Nevertheless it would be better if such vast funds were being funnelled into the bank accounts of small businesses and innovative firms looking to grow, rather than the pockets of recruitment consultants."

Mr Watt said: “The contract covers the recruitment of a Chief Executive Officer and Chief Investment Officer.

“Following a review of existing framework agreements and market testing of a number of executive search agencies, we undertook a ‘negotiated without prior publication’ procurement process, allowing the recruitment for both roles to commence in April. 

“The time limits for open, restricted, or competitive procedures with negotiation would have resulted in delays to the recruitment process.

“It is vital that we reach a broad and diverse spectrum of high-quality candidates for these key leadership roles. Specialist executive search agencies with relevant experience were identified and assessed based on our requirements.

“The assessment criteria considered cost alongside proven ability to successfully source high calibre candidates given the specialist nature of the skills the Bank requires.

“Overall, we believe the agency selected represents best value for money. It is our plan to have someone in role by the end of 2022/23 but this will be subject to notice periods. The most important thing is that we attract the right candidates for these roles. 

“We have a very capable Interim Chief Executive in place, supported by a strong leadership team.” 

 The Scottish Government said the recruitment was a matter for the SNIB.

A spokesman said: “As an independent financial institution, recruitment is a matter for the board of the Scottish National Investment Bank.”