First Minister Nicola Sturgeon, Tory leader Douglas Ross, Derek Mackay, who signed the document and later ran away on the eve of Budget Day and the unfinished Glen Sannox.
Special report by Bill Heaney
Audit Scotland’s damning report on the Scottish National Party government’s failure to build two lifeline ferries for services to the Western Isles was published on Wednesday.
When it was left to pale and pregnant Finance Minister Kate Forbes to respond in the Holyrood chamber and to the media, she maintained she didn’t know who made the key decision to sign off the “most disastrous” contract since the beginning of devolution in Scotland.
Conservative leader Douglas Ross asked: “Can the First Minister give a straight answer where the Cabinet Secretary for Finance and the Economy could not? Which minister gave the green light for the contract—against expert advice?”
Ms Sturgeon told him: “I say candidly that the problems with the procurement—or rather, with the construction; the procurement was not the issue—of the ferries have resulted in delay, cost overruns and a very negative impact on island communities. That is far from satisfactory, which is putting it mildly.
“The report that Audit Scotland published yesterday is entirely fair and justified. There are a number of complexities, but the contracts in question are public contracts, so the buck stops with the Scottish Government.
“Pre-2019, there were issues with the quality of work and the progress of work when the yard was in private ownership. Since nationalisation of the yard at the end of 2019, more problems have been identified, with the cabling problem being the most significant. On top of that, of course, there has been additional delay because of Covid.
“However, we remain focused on delivery of the ferries. The actions that the Scottish Government has taken have helped to secure jobs at the last remaining commercial shipbuilder on the Clyde. I think that that is important.”
The ferries are running at something like £250 million over budget and are five years late on their delivery dates.
Ms Sturgeon said: “To turn briefly to Douglas Ross’s specific question about who was transport minister at the time, I note that that is, of course, a matter of public record. It was Derek Mackay, but our Government—I understand that the idea might be alien to the Conservatives—operates under collective responsibility. Ultimately, as with any decisions, whether I am personally involved in them or not, responsibility stops with me.
“Many of the documents that relate to the decision have been in the public domain for some time. They clearly narrate the issue of the lack of a full-refund guarantee. They also clearly narrate the mitigations that were put in place to reduce that risk. Those documents are in the public domain and are available for anyone to review.”
But Douglas Ross was not content with that answer. He said: “Yesterday, the finance secretary could not tell Parliament or the media who was to blame but, 24 hours later, the SNP spin machine has spun into action and it is the fault of the disgraced former finance minister.
“Let me get this absolutely straight. The First Minister is claiming that she had no involvement. The Audit Scotland report confirms that SNP ministers were aware of the huge risk of the project, but carried on regardless.
“The Government that she leads willingly decided to charge ahead, against expert advice. The First Minister is now trying to blame Derek Mackay. It seems to be very convenient that the person who is getting the blame is no longer here. It was the First Minister’s Government, her Cabinet and her decision.
“Let me ask again. She is saying that the transport minister took that decision. What input did the First Minister have in that decision, through the Government that she leads?”
The First Minister looked unfazed. She said: “I am genuinely not sure whether Douglas Ross listened to a single word that I said. He asked who the individual minister was; I did not volunteer the information. It is a matter of public record who the transport minister was at the time of the decision; it is a matter of public record that it was Derek Mackay.
“This Government operates by collective responsibility and I am ultimately responsible for all decisions that the Government takes. The buck stops with me. I have never tried to shy away from that on any issue. I know that that is not how things are done in the Conservative Government at Westminster, but that is how things are done here.
“Perhaps Douglas Ross might want to reflect on what I am actually saying, before he asks his next question. I am ultimately responsible for all decisions of the Scottish Government. That is why I am standing here answering questions.
” As I said, the documents are available in the public domain. Caledonian Maritime Assets Limited had expressed a particular concern about the lack of a full-refund guarantee. Those concerns are set out in the documents. So, too, are the actions that were taken to mitigate the risks. The Government then came to a decision based on the balance of risk. The documents expressed the view that the current deal that has been negotiated with Ferguson Marine (Port Glasgow) Limited is the best deal that can be achieved, given the financial restrictions that the yard is operating under.
“Three key changes were made; they are all set out in the Audit Scotland report. They were: that there was an increase in the final payment so that more money was being withheld; that CMAL would take ownership of all equipment, machinery and materials as they arrived at the shipyard; and that FMEL would require all major suppliers to offer a full-refund guarantee. Those were the changes that reduced the risk and underpinned the decision that the Government arrived at.
“I return to the central point. I am not defending the cost overruns or the delay in construction of the ferries; they are completely unacceptable. However, at all points, the motivation of the Government has been to save jobs and the shipyard and to ensure that the ferries can be delivered, albeit that they will be late, which is a matter of deep regret. That is what we continue to focus on.”
Douglas Ross pressed on: “The First Minister says that she takes ultimate responsibility, then throws an ex-minister—a disgraced SNP ex-minister—under the bus. If we are looking for ultimate responsibility from the First Minister, will she tell us why a key safeguard that could have saved Scottish taxpayers hundreds of millions of pounds was removed?
“Will she tell us, with her ultimate responsibility, why Ferguson’s started building the ferries when there was not even an agreed design? With her ultimate responsibility, will she tell us why Ferguson Marine was given the contract in the first place? With her ultimate responsibility, will she tell us why there is not going to be a public inquiry into the whole scandal? We need a public inquiry because Audit Scotland tried to get answers but could not. Audit Scotland has said: ‘There is no documented evidence to confirm why Scottish ministers were willing to accept the risks of awarding the contract to FMEL, despite CMAL’s concerns. We consider that there should have been a proper record of this important decision’.
“The decision is one of the most reckless decisions that have ever been taken by a Scottish Government, and so far it is costing a quarter of a billion pounds of taxpayers’ money. Why cannot the body in Scotland that is charged with scrutinising public spending give a shred of evidence to justify your Government’s decision?”
The First Minister stuck to her charted course through the crisis. She said: “Nobody who had read Audit Scotland’s report could reach that particular conclusion, but I will come back to that.
“I will say, first, that if Douglas Ross thinks that it is unimportant who the individual minister was and that—as I agree—the buck stops with me, why was his first question to ask me who the individual minister was? Clearly, he must have thought that it was important. I did not intend to come here and do anything but accept full responsibility.
“I come to the questions—let me answer them one by one. I have already run through the decision to proceed and the lack of the full builder’s refund guarantee. That decision was clearly taken based on the balance of risks. CMAL had concerns about the matter, but a range of actions had been taken—I have set out exactly what they were—to mitigate the risks. The conclusion, which is in the documentation that is publicly available, was that the deal that was negotiated was the best one that could have been achieved in the circumstances.
“I think that the second question that Douglas Ross asked me was why was the contract awarded to FMEL when it was the most expensive bid. That question, too, is answered in the Audit Scotland report. The review found that it was the most expensive bid—if memory serves me correctly, that was known at the time—but CMAL had ‘also assessed it as being the highest quality’, so over all, it achieved the highest combined cost and quality score of the seven bids.
“That was the decision that was taken at the time. Of course, ministers are not involved in procurement decisions.
“Lastly, on the question of a public inquiry, we have had a parliamentary committee look into the issue and we have now had a major Audit Scotland review. Audit Scotland itself recommends that on completion of the vessels, there should be a formal review of what went wrong … with a view to learning lessons.
“The Scottish Government will consider what form that further review should take. We will consider the matter carefully and will, of course, report to Parliament in due course.”
Douglas Ross replied: “This is ridiculous. We are fortunate in Scotland to have two Governments, but only one of them is currently building ships in Scotland that actually sail. That is because of this First Minister’s record in government. Let us look at it again.
“Ferguson Marine’s was the most expensive bid figure, yet—as the First Minister has just said—it was chosen on the basis of quality. It was chosen on the basis of quality when ferries are two and half times over budget.
“Hundreds of millions of pounds of taxpayers’ money have already been wasted. There is a five-year delay at least, and there are still 175 faults with the ferries, which are still being built. This is one of the worst public spending disasters since devolution.
“Who messed up? Who knows, in the Scottish National Party’s secret Scotland—because all the evidence is gone? Audit Scotland could not get to the bottom of a number of points. The only scraps of paper that we have left on the disastrous decision are the old SNP press releases that claimed that they were saving Scottish shipbuilding.
“When the First Minister visited the ferries in 2016, were the painted-on windows not a sign that her decision was an absolute shocker?
Ms Sturgeon hit back: “I said candidly at the outset that I think that the situation is deeply regrettable. When I visited the yard it was, of course, in private ownership, and assurances were given about the completion of work. The problems that have led to cost overruns, delays and—worst of all—a negative impact on our island communities, are deeply regrettable.
“At every step, the motivation of the Government has been to secure employment and the shipyard, and to get the ferries completed. That is what we will continue to focus on. We will learn the lessons in the Audit Scotland report and we will make sure that all its recommendations are taken forward.
“Douglas Ross might think that it is unimportant that we have saved 300 jobs and a shipyard, but I think that those things matter, which is why we will now focus on making sure that the yard has a positive future.”