Committee
Public Audit Committee 28 April 2022
28 Apr 2022 · S6 · Public Audit Committee
Item of business
Section 23 Report: “New vessels for the Clyde and Hebrides: Arrangements to deliver vessels 801 and 802”
Thank you convener, and good morning Mr Boyle. Last week, Mr Boyle, you expressed your frustration that you cannot get to the full facts and the heart of the ferrygate scandal. We are barely a week into our inquiries and I think that some members already share that frustration. Key documents cannot be found or were not prepared. Key witnesses have been gagged. There are reports of possible fraud and corruption. Scotland’s former First Minister has gone as far as saying that we should be calling in the cops. Today, Erik Østergaard, the chairman of the Government’s ferries quango when the deal was done, has said that CMAL was given written confirmation to proceed with awarding the contract to Ferguson Marine, but it was not given any written confirmation of why that was the case. As with all scandals, there is perhaps now some whiff of a cover-up, with people and possibly even Government ministers covering their tracks. We are only one week into our inquiries, and I do share your sense of frustration. However, we are not alone. Jim McColl, who we should not forget was once a pal of the Scottish National Party—he had the First Minister on speed dial and was one of the Government’s favourite Scottish businessmen—is clearly frustrated; his submission to the committee is stark and points to more than just a fallout among friends in the nationalist movement. He says that the procurement process was driven by a party-political dynamic and was rushed to deliver headlines for the SNP conference; he also says that CMAL’s concerns were not conveyed to him and that not enough time was given to the feasibility of the conceptual design. If that were the case, it would be very serious indeed. In fact, we would be talking about corruption of the procurement process and it would explain why things since then went badly wrong and why ministers potentially have been keen to cover their tracks. In the absence of any documentary evidence to disprove all that, how concerned should we be about the original process being conducted along such lines? If Mr McColl’s claims are true, does that explain why we have seen such resistance to full and total transparency at a critical point in this process?
In the same item of business
The Convener
Lab
Item 3 is the continuation of our evidence session with the Auditor General and his team on the report into new vessels for the Clyde and Hebrides. We are pl...
Stephen Boyle (Auditor General for Scotland)
Good morning. Key message 1 in our report draws together our overall conclusion about the availability of documentary evidence for that key part of the decis...
The Convener
Lab
Are you saying that that critical piece of evidence does not cover in full the ministerial decision to mitigate the risk?
Stephen Boyle
It is perhaps worth commenting that, since the evidence session last week, the Scottish Government has confirmed that it has been unable to find the relevant...
The Convener
Lab
I was going to turn to that next. In the light of the questioning of the First Minister last Friday, a Scottish Government official was reported to have sai...
Stephen Boyle
That is a reasonable connection, convener. Through our work, we request and receive generally all relevant information in respect of important decisions. Thr...
Antony Clark (Audit Scotland)
I will be clear with the committee: we received positive and full co-operation from the Scottish Government when conducting the audit. As the Auditor Gene...
The Convener
Lab
Okay, Mr Clark, I will leave the redresses to you or the Auditor General. Did you get an explanation as to why that documentary evidence did not exist? 10:00
Stephen Boyle
We were advised that ministers were content to proceed cognisant of the risks that existed, so I am not sure that we are able to confirm that there was docum...
The Convener
Lab
Okay, so we do not know whether the Government is searching for something that exists.
Stephen Boyle
We have probably gone as far as we are able to, convener, and the committee might wish to pursue that line of inquiry directly with the officials involved.
The Convener
Lab
Thank you very much indeed. Willie Coffey has a number of questions to put.
Willie Coffey
SNP
My questions relate to the application of quality standards in design and construction, Auditor General. As you and members are well aware, that is a common ...
Stephen Boyle
You are right that the Rural Economy and Connectivity Committee conducted an extensive review of the circumstances around the procurement, the design arrange...
Willie Coffey
SNP
I will ask about the general application of quality standards. That is a recurring theme, as we all know, but in this case, they apply to the shipbuilding in...
Stephen Boyle
I will ask Antony Clark to build on some of the evidence that we gave last week in which we explored the nature of risk and risk transfer in the shipbuilding...
Antony Clark
Before I address that second point, I want to build briefly on the Auditor General’s response to your earlier question whether we found anything new beyond w...
Willie Coffey
SNP
I was just coming to that particular issue. Paragraph 50 of the report says that “CMAL could only advise” and not require Ferguson to alter its approach to d...
Antony Clark
I will respond to that question, if that is okay. We are not really in a position to provide a comparator for these two vessels with regard to the number of...
Willie Coffey
SNP
This is my last question for the moment. Again, it is on the quality issue, which is crucial and goes to the heart of much of all this. In paragraph 62 of th...
Stephen Boyle
I will address both those points. I go back to the point that Antony Clark made regarding the extent to which we are able to pass judgment on the quality or ...
Willie Coffey
SNP
Sorry, Antony—I just want to come in here. Did Ferguson dispute that the cables were too short?
Stephen Boyle
I do not think that we know the detail of that.
Angela Canning (Audit Scotland)
Can I come in here? I think that the issue with the cables has just been discovered more recently by Ferguson Marine (Port Glasgow) Ltd, and Parliament was u...
Willie Coffey
SNP
So it was not noticeable until late on the process that the cables in the vessels were too short.
Angela Canning
My understanding is that that event has more recently come to light as FMPG has been reviewing the work in the shipyards.
Willie Coffey
SNP
Okay—thank you.
Antony Clark
I will step back briefly and talk more broadly about the governance arrangements. It is clearly the responsibility of the fabricator to fabricate the ship, b...
Willie Coffey
SNP
I know that none of us is an expert in building ships. Nonetheless, Auditor General, do you recognise that some of these issues are recurring themes for the ...
Stephen Boyle
I absolutely recognise the committee’s long-standing interest in the successful delivery of complex infrastructure investment projects. I absolutely agree on...