Hansard

I remind members of my voluntary register of trade union interests.

I present this unanimous report to Parliament on behalf of the Public Audit Committee, and I thank all those who have contributed to it, not least the committee clerks and other parliamentary staff for the work that they have put into it.

It has been a great privilege to serve as the convener of the committee for the past four and a half years. Whoever takes over after the elections in May, in the next session of Parliament, can look forward to continuing much of the work that has begun in this session of Parliament, not least the continuing scrutiny of Ferguson Marine (Port Glasgow); the final delivery of the Glen Rosa; a performance audit on completion of that order, which has already been promised to Parliament by the Auditor General; and the results of the forensic audit that is now being undertaken by Grant Thornton, which will be the subject of additional assurance by the Auditor General, ensuring that it will also come before this Parliament.

A forensic examination of the historical accounting records of Ferguson Marine is an audit that the committee strongly recommended be undertaken, because we believe that it is a matter of significant public interest that we properly understand—literally in forensic detail—how public money was spent when the yard was in private ownership between September 2014 and December 2019.

The committee report that we are debating this afternoon has its roots in a section 22 report that was laid before Parliament almost a year ago to the day. As part of our inquiry, we took evidence from old and new accountable officers, from the strategic commercial assets division of the Scottish Government, and from the trade union shop stewards in the shipyard itself. We did not just sit in Parliament—we went to Port Glasgow and spoke to the workers as well as to the managers.

Let me make clear at the outset why we produced our own report, conducted our own investigation and called for this debate in Parliament today. It is because we do not want this yard to fail. It is precisely because, above all else, we want this yard to succeed. So, when the Auditor General warns in his report to this Parliament that he is concerned that Ferguson Marine (Port Glasgow) may not be “a going concern”, the committee has responded by concluding that, without “urgent investment”, and so without new orders, the yard may not survive.

So, this report is about securing the yard’s future—we make no apology for that. It is about productivity and investment. It is about jobs and a strategic industry. It is about the last commercial shipyard on the Clyde.

That is why, when the Deputy First Minister told the committee just a few weeks ago, in early October, that, of the £14.2 million that has been set aside for capital investment in the yard, only £570,000 has been spent—that is less than 5 per cent—the committee was alarmed.

In paragraphs 49 to 52 of this report, which we should remember was first published in early July, we make it plain—again unanimously—that the Scottish Government needs to act with urgency and that the Scottish Government and FMPG—the ministers and the board—must publish FMPG’s strategy and revised business plan as soon as possible. We are still waiting.

The yard simply cannot modernise on the basis of a perpetually pending plan. The director general for economy told the committee way back in February:

“We need to align the nuts and bolts of what is required for the investment with the strategy and the business plan.”

We are still waiting.

But our concern is not solely with the Government. When we quizzed the then chair of the FMPG board, Andrew Miller, about the strategic plan for the yard, he answered in both a confused and a confusing way. He told us:

“We have been trying to pull that narrative into the future, with substantiated data to articulate the dialogue of what the business needs to do”.—[Official Report, Public Audit Committee, 5 February 2025; c 45, 41]

What chance have you got?

Mind you, this is the board chair who told us in June 2023 that he did not, in his words,

“understand the narrative around the term ‘bonus’.”—[Official Report, Public Audit Committee, 1 June 2023; c 17.]

Management bonuses were not bonuses; they were “retention payments”, he claimed.

He also told us

“We would definitely like to deliver some good news in the next six months.”—[Official Report, Public Audit Committee, 5 February 2025; c 46.]

That was 10 months ago. We are still waiting.

In carrying out our parliamentary scrutiny and taking evidence on activities like the extraordinary secondment arrangements or the eye-watering exit payments, the committee has had to make tough recommendations. We cannot ignore what went on.

Take the secondment. Here we had an employee—seconded from another public sector organisation, Caledonian Maritime Assets Ltd—who decided to form their own limited company in which they were the sole shareholder, in which they were the sole director and into the bank account of which their FMPG salary was paid. Between February 2023 and March 2024, that added up to over £144,000. Neither the board nor even the remuneration committee had approved this arrangement. A substantial sum of unpaid income tax and national insurance contributions had to be reimbursed to His Majesty’s Revenue and Customs.

In the lexicon of the Auditor General, this represented a weakness in governance and transparency, and the committee agreed, but it is hard to conclude anything other than that this was, in my lexicon, a secretive, tax-avoidance con trick. We should remember that this is in an organisation that is 100 per cent owned by the Scottish Government and so 100 per cent owned by us, and which exists in the first place only because of all of us paying all our taxes.

Then there were the exit packages. Three employees left with pay-outs above £95,000—which not only is a considerable amount of public money, but is above the threshold that requires advance Government approval—but this happened with only one out of the three exit payments, so where were the controls, internal and external? Where was the accountability? Where was the governance? Where was the Scottish Government’s sponsor division?

Let me offer another personal insight. In my almost five years of chairing the Public Audit Committee, it has never been those toilers, those lowest-paid workers or those creators of the wealth who break the rules. It is always—always—the highest paid and the most powerful people in an organisation who break the rules. It is as though some people believe that there is one set of rules if you are at the top and another set of rules for the rest of us.

Incredibly, we also discovered that, while the organisation operated with an audit and risk committee for three years post-nationalisation, it did not have a dedicated internal audit function until the financial year 2023-24. So, our report is clear—given the scale of historical weaknesses and the number of high-risk areas demanding close attention, the Scottish Government needs to closely monitor the internal audit plan.

Let me end, Presiding Officer, where I started. The Public Audit Committee of this Parliament wants modernisation in the yard. All we want is for the workers to be given a fighting chance to compete for future work. We think that the workforce should be at the centre of decision making, not at the margins of it, and that, if they had been—instead of a reliance on retired naval commodores and rear admirals, international management consultants and highly paid turnaround directors—there would not have been some of these multiple and repeated failings, and our island communities would have been served by these two ferries quite some time ago.

This is a state-owned yard and the Scottish Government is the sole shareholder. There is no shortage of shipbuilding orders out there and no shortage of potential work. So, the cross-party parliamentary Public Audit Committee is unanimously calling on this Government to act decisively, because, if it does, this yard, which has a distinctive and proud history, can have a distinctive, proud and positive future.

Let me finish with something that Alex Logan, the GMB convener, candidly said to me when we visited the yard back in June. I hope that all parties will pay attention to this. He said:

“We don’t want to be just another sub-contractor to BAE Systems. If that’s the case, we may as well just get taken over by BAE and become a defence sub-contractor. But that’s not who we are, or have been for a hundred years.”

That is what we need to fight for and that is what this is about. On behalf of the Public Audit Committee, I move the motion in my name,

That the Parliament notes the conclusions and recommendations contained in the Public Audit Committee’s 3rd Report, 2025 (Session 6), The 2023/24 audit of Ferguson Marine (Port Glasgow) Holdings Limited (SP Paper 846).