Audit Scotland expresses concerns over the future viability of the publicly-owned shipyard
By Lucy Ashton
The SNP’s ferry fiasco is set to cost the public purse almost £300 million after doubts were raised about the final cost and completion dates of the two vessels. But despite the failure, senior staff at publicly-owned Ferguson Marine Port Glasgow have been netting £87,000 bonus payments.
The stark situation was laid out in a report from Audit Scotland presented to MSPs at Holyrood on Tuesday. Both the Glen Sannox and unnamed vessel 802 have yet to take a single passenger, are both five years overdue and are millions of pounds over budget having had an original price of £97 million.
The report currently estimates that both ships will cost £293 million, Although Audit Scotland says the final total “remains uncertain”. The body also reckons that there is a £9.5 million shortfall despite Scottish Government funding already being confirmed for 2022/23 and 2023/24.
The report also raised doubts about the longer-term viability of the FMPG shipyard, which was taken into public ownership by the nationalist government in 2018.
Auditors say further investment in the shipyard and workforce is now needed to help secure future contracts. The Scottish Government has commissioned an independent review of future options for the Ferguson Marine shipyard which is due to report shortly.
Auditors also raised concerns over £87,000 of performance bonus payments to six senior FMPG managers during 2021/22. They said it “is not clear how their performance was assessed, nor were appropriate frameworks and governance in place”. They also said FMPG should have sought SNP government approval for the payments.
The payments were approved by the remuneration committee at the yard and based on a paper from former turnaround director Tim Hair, who recommended a 7.5 per cent bonus for the directors.
Mr Hair was also paid a total of £1.8 million during his time at the yard between August 2019 and February 2022.
Scottish Conservative transport spokesman Graham Simpson described the report as “damning”. He added: “Betrayed islanders will be wondering when this SNP ferry fiasco will ever end.
“The report also contains the remarkable revelation that the future of Ferguson Marine remains uncertain despite hundreds of millions of taxpayers money being poured into it on the SNP’s watch. The SNP-Green government need to urgently spell out what the future holds for the yard and if they are going to remain competitive in any future procurement processes.
“It is also deeply concerning that widespread failure has been so handsomely rewarded with management receiving near six-figure bonuses, even without SNP government approval. The SNP’s ferry scandal demands an independent inquiry to find out the whole truth of this appalling saga.”
Scottish Labour transport spokesman Neil Bibby said: “Islanders, taxpayers and yard workers are all being failed at every turn, and we still can’t get straight answers on what went so badly wrong. While the public purse picks up the tab for spiralling costs, senior management are being handed fat cat bonuses with no scrutiny.
“The SNP need to get a grip of this shambles, deliver these lifeline ferries and secure a future for this iconic shipyard.”
The Glen Sannox was famously ‘launched’ in 2017 with painted on windows. Nicola Sturgeon attended the sham event which has come to symbolise the whole affair.
Stephen Boyle, Auditor General for Scotland said: “It is deeply concerning that the costs to complete these ferries have continued to escalate, whilst the island communities these boats are meant to serve remain significantly impacted. Despite substantial sums of public money being invested, there is still no certainty over how much the ferries will cost, when they will be ready or whether the shipyard has a viable future.
“It is unacceptable that performance bonuses were awarded to senior managers at the shipyard, without proper governance for such payments. The Scottish Government needs to make sure its rules over pay are followed by this public body.”
A Scottish Government spokesman said it was “committed to helping Ferguson Marine Port Glasgow (FMPG) secure a long-term sustainable future”. He also said it was a “concern” that approval for the bonuses was not sought.
He added: “However, the new senior management team is committed to consulting with the Scottish Government as required on this issue in the future. Significant progress has been made by the Chief Executive and Chair of the Board on the governance structure at the shipyard over the last 12 months.
“We deeply regret that work on the two ferries is taking longer than it should. The Scottish Government remains focused on supporting our island communities that rely on this type of vessel.”
Responding to Audit Scotland’s report on Ferguson Marine, which states that “there is still no certainty” over costs, delays and the viability of the shipyard’s future, as well as criticising bonus payments to Ferguson’s senior management, Scottish Liberal Democrat economy spokesperson Willie Rennie MSP, pictured right, said: “This Audit Scotland report into Ferguson Marine is just unbelievable.
“Big bonuses for ships that still aren’t ready. No clear understanding about when these ferries will be complete and what the final bill will be.
“This is all under the direct control of the SNP Government. We were promised the nationalised service was going to be so different, we were promised that these ferries were now on track, we were promised that the financial bill would be brought under control. All of that is complete and utter nonsense.
“This is a dreadful report and we need an urgent statement from ministers to explain what on earth has gone wrong.”