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I might come back in with other questions later.

Probably not that long.

That is great, and it is good news. That leads me sideways into another question, which is about your ways of working. The paragraph on that in the annual report is relatively short and does not really say much. We have had a lot of conversation about your high rent costs across your three offices, yet, post pandemic, you seem to be operating a much more hybrid model. Is there no way that you could reduce running costs rather than see them go up? They should surely be coming down.

I believe that you were here, David, for the earlier evidence session, so you will have followed that line of questioning. At any point when you were looking at the accounts, did any of the issues that we identified in relation to where there was quite large variance in the accounts raise questions?

I will refer to two examples that might help you come to an answer on this. The travel and subsistence budget went from £500,000 to the reported figure in the accounts of only £82,000, which raises the question of whether there was just a change in the way that things are reported—that is, whether the line that such things appear in has changed due to changes in accounting practices—or whether there has been a huge reduction in the forecast figure versus the used.

The depreciation figure almost doubled from £500,000 to £1 million. Did those things raise flags as you went through the accounts, and were there any conversations around them?

Are you generally content with the rationale and explanations that have been given, including what you have heard this morning?

It is just that there is a variance of 15 per cent between what was approved at budget and what was spent, which is stark. I guess that I was trying to get under the skin of why the costs went up so much. I wondered whether some of the external firms charged higher rates or different multiples, such as double or triple time, in order to get work finished. I am a little further forward in understanding the 15 per cent figure, but I still do not fully understand it.

We look forward to seeing those savings on the balance sheet in due course.

My substantive question—I am sorry that I got sidetracked with some other questions, convener—is a specific one about the amount of money that is being paid in fees to external firms. That has increased considerably from just over £7 million to £8.1 million. Your annual report seems to suggest that that increase of more than £1 million is due to a lag in the completion of audits, if I interpret that correctly. You can correct me if I am wrong about that. However, the amount of audits that have been completed has marginally reduced by a couple of percentage points, so it does not seem to quite add up. Perhaps you could enlighten us as to why there has been such an increase in the amount of money that is being paid to external companies.

I have a few supplementary questions resulting from that conversation before I move into my main line of questioning.

I should say good morning. I know that it is a Monday morning, but we will get through this together.

Following on from the staffing issue, I want to look at staffing costs and pay rises, in particular. I have just spotted year-on-year changes on page 48 of your 2023-24 annual report and accounts, under your fair pay disclosure arrangements. This is backed up by looking at the table. It seems to me that the average year-on-year increase for employees is around 5 per cent—I presume that that is a general inflationary measure that you have introduced—but the increase is much higher for the higher earners in the organisation. In particular, the highest-paid individual received an 8 per cent increase. Is there any particular reason for that?

That is understood. Obviously, there are some very high-profile areas of the public sector in which requests have been made for double-digit increases in pay and staff. I am not expressing a view on that; I am simply stating a fact. However, that leads to the question how much money you will have to budget for and to ask for. There seem to be a lot of known unknowns in that, but it is a well-established process. Is that a fair description?

That is helpful—thank you.

I am looking at the audit performance in terms of audits completed on time on a sectoral basis—we have touched on that, and you gave us an indication of some of the reasons behind it—and I note that there has been quite a stark drop over the past couple of years. If we look back to 2018-19, nearly every major sector was delivering audits on time. Looking at the chart, I guess that the figures were north of 95 per cent across local government, the NHS, central Government and the FE sector. In 2022-23, however, the numbers dropped considerably, with some areas performing better than others. The NHS was sitting at 74 per cent, at the high end of the spectrum, while the figure for local government was as low as 29 per cent. That is a stark difference.

Will you expand on what has happened over the past couple of years? Obviously, the pandemic is the number 1 factor and the buzzword there, but there was a drop in 2019-20, which was before the pandemic really hit. The numbers were already starting to fall in relation to the targets. I give you an opportunity to expand on that a little bit.