HES has ‘made progress’ but ‘significant risks’ remain, watchdog report finds
A follow up report into Historic Environment Scotland has found the organisation is making improvements but must move faster
Historic Environment Scotland has made progress but “significant risks” remain over a raft of failings, a watchdog has found.
Scotland’s Auditor General has published his annual report and a follow-up Section 22 report into the heritage quango.
Last year Stephen Boyle set out a lengthy list of failings uncovered at the heritage quango.
Now, Mr Boyle’s latest reports show, the organisation has made progress to rectify weaknesses in the organisation.
Financial controls have now been designed to counter fraud and action is in progress to strengthen the controls over expenses and hospitality.
However, serious concerns still exist in relation to the storage of archive materials.
Mr Boyle, Auditor General for Scotland, said HES had taken action to investigate and begin to address weaknesses outlined in last year’s Section 22 report.
“However, ongoing leadership instability, along with other challenges, has had an impact on improvements being put in place,” Mr Boyle said.
“It's now important that my recommendations, and those of the independent review, are fully implemented at pace by HES.”
Last year’s auditor report highlighted significant weaknesses in the financial management of electronic purchasing cards and hospitality.
The updated report says HES has made progress in addressing these weaknesses with revised policies introduced in July 2026.
Work is ongoing, the auditor says, to strengthen the wider control framework, including revisions to the Hospitality and Ticketing Policies, and the Code of Conduct.
The report describes performance for 2025/26 at HES as “mixed”, although the quango has “recognised where action or revised performance measures are required”.
A serious concern raised in 2025 was that the HES board was not provided with a paper to scrutinise the cancellation of a specialist archive storage project, which has already cost £2.9 million, with a further £0.5 million likely to be spent.
The auditor says the absence of a long term solution for the storage of archive materials continues to present a “significant risk” to HES.
Issues raised in the auditor’s previous report had been highlighted in The Scotsman, which has detailed a slew of unacceptable behaviour at the organisation relating to procurement, hospitality, bullying and other issues.
These include that a senior staff member was sanctioned for twerking in front of actor Martin Compston.
HES receives millions of pounds of taxpayers’ money annually to preserve and manage some of the country’s most important historic buildings, including Edinburgh Castle and Skara Brae.
READ MORE:Historic Environment Scotland CEO Katerina Brown 'to step down' from role at crisis-hit quango
Ronnie Hinds, Interim Chair of Historic Environment Scotland, said the report highlighted “significant organisational challenges” alongside a year of “important achievements”.
Mr Hinds added: “Those achievements reflect the expertise and commitment of our staff, but they do not diminish the concerns about governance and leadership.
“Our public responsibilities must be matched by the highest standards of accountability and conduct.”
He acknowledged that, while progress has been made, changes still need to be fully implemented and “shown to be operating consistently”.
“The Board has accepted all the recommendations of our independent organisational and cultural review and agreed a plan for their implementation,” he said.
“Public confidence must be earned through improvements that stand up to scrutiny.”
HES’s Chief Executive and Chair of the Board both left in 2026, with interim appointments made to replace them.
The auditor recognises that the continuing change and instability has likely impacted on how quickly HES has been able to make improvements.
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