Unacceptable weaknesses and toxic culture at Historic Environment Scotland, watchdog finds

A scathing report into Historic Environment Scotland has found unacceptable weaknesses in its governance, including financial management.

Audit Scotland has published its recommendations for the heritage body, concluding that strong controls must be put in place to prevent fraud and ensure value for money.

Historic Environment Scotland (HES) maintains more than 300 historic sites around the country and is funded through Scottish Government grant-in-aid money as well as commercial income.

The audit comes after a number of issues at the organisation, including a senior leader being sanctioned after allegedly “twerking” in front of actor Martin Compston at an Edinburgh Castle event.

Chief executive Katerina Brown, not believed to have been involved in the incident with the actor, was also suspended following an investigation into her conduct.

The organisation then operated without a chief executive or accountable officer for almost six months of the year.

The findings of the 2024/25 audit into the public body has raised concerns about unclear processes for complimentary tickets to events at its venues and a lack of a formal register of interests for the executive leadership team.

It has also warned that allegations of a toxic workplace culture must be fully investigated.

Issues were raised regarding the use of some 400 electronic purchasing cards, with one in every four members of staff being in possession of one.

Compliance checks are said to be carried out on 8% of transactions each month, with £1.9m of public money spent on the cards in 2024/25.

The report finds that controls put in place should be strengthened to safeguard the use of public money.

Concerns were also highlighted over hospitality.

A contractual agreement for HES to receive complimentary tickets to events at its venues has been described as a “very unusual circumstance for a Scottish public body”.

The auditor found that there is no policy in place covering the distribution of tickets to ensure that it is done in an appropriate and transparent way.

The auditor warned that if the complimentary tickets within the contract impact the income generated by the body, HES should be able to demonstrate the public value derived from the arrangement.

The report goes on to detail that the HES board was not provided with a paper to scrutinise the cancellation of a specialist archive storage project, which has already cost £2.9m, with a further £500,000 likely to be spent until the lease break is reached.

To provide a short-term solution, the existing lease of John Sinclair House has been extended by a further two years at a cost of £536,151 a year.

The decision being made without appropriate scrutiny from the executive leadership team or board has been described as “unsatisfactory”.

The report concluded that the Scottish Government should have appointed a substitute accountable officer during the six-month period that it was without one, to provide leadership and accountability in accordance with ministerial guidelines.

Stephen Boyle, auditor general for Scotland, said: “Historic Environment Scotland is navigating a period of significant instability and challenge, with a number of staff-related matters that need to be resolved. This includes allegations of a toxic workplace culture, which needs to be fully investigated and addressed.

“My report outlines unacceptable weaknesses in HES’s governance arrangements. It is critical that strong controls are now put in place to prevent the risk of fraud and demonstrate that value for money is being achieved.”

HES said an independent review of its structure, efficiency and culture will be set up in the New Year.

A spokesperson said: “We acknowledge the serious governance issues and cultural problems identified in the Section 22 report, and the impact of recent leadership instability.

“We are committed to rebuilding trust through strong governance, clear processes, and a culture of accountability.

“We have strengthened internal controls and compliance monitoring and are updating relevant policies and procedures.

“We are working closely with Audit Scotland and the Scottish Government to implement all findings and ensure robust compliance.

“An independent review of the structure, efficiency and culture of HES will be set up in the New Year to set out what has gone wrong and identify what needs to be done to ensure that the identified failings are rectified and that HES can provide full assurance of effectiveness and value for money.”