Council ‘cleared’ over Lothian Buses scandal

An independent report into the council’s handling of the damaging boardroom battle at Lothian Buses has cleared the city of any wrongdoing.
Ian Craig called Lesley Hinds. Picture: Esme AllenIan Craig called Lesley Hinds. Picture: Esme Allen
Ian Craig called Lesley Hinds. Picture: Esme Allen

The report by independent audit firm KPMG found that the senior councillors and officials respected legislation governing public transport bodies, as well as shareholder rules.

KPMG’s investigation confirms that the council forced former Lothian Buses chairwoman Ann Faulds to resign after she recommended that chief executive Ian Craig be sacked, fearing a costly legal battle over his dismissal.

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It also confirms that during a crunch mediation meeting that went badly wrong, Mr Craig broke confidentially by calling transport convener Lesley Hinds to report that Ms Faulds had presented him with a payoff if he left the firm.

And it reveals that Cllr Hinds attempted to parachute herself onto the Lothian Buses board as a full member, attending a board meeting only to be told that her appointment would create a conflict of interest and potentially break the law. She was instead made an observer.

Union representatives, who have repeatedly called for the city’s transport convener to resign over her role in the dispute, told the Evening News they continued to have no confidence in Cllr Hinds.

The saga began in August, when Mr Craig’s three deputies – operations director Bill Campbell, engineering director Bill Devlin, and finance director Norman Strachan - lodged a grievance against him, complaining he was undermining them and acting without proper accountability.

An investigation by the senior Lothian Buses non-executive director, John Martin, upheld five of eight complaints, but stopped short of recommending any disciplinary action.

However, faced with widespread disquiet with Mr Craig within the company, and having lost confidence in him, Ms Faulds asked the council for permission to sack him – only to be told to sign a resignation letter herself.

Council Leader Andrew Burns said: “KPMG’s independent report provides a comprehensive analysis of events, demonstrating that the Council, as majority shareholder, acted consistently and in accordance with the proper governance procedures set out in the shareholder agreement relating to Lothian Buses.

“We welcome its findings and now look to focus on the future continued success of Lothian Buses.”