MSPs' new concern over lack of oversight over Scotland's ferry fiasco

Gray answered questions from MSPs as it emerged that public spending watchdogs, Audit Scotland, in an analysis in March 2022 stated the Scottish Government "is committed to paying the additional vessel costs, regardless of the final price".

It comes after the Herald revealed that the First Minister was given secret advice that the public cost of the ferry fiasco at Ferguson's is expected to soar by even further than anticipated when ministers decided to continue to go ahead with much of the project despite it not being value for money.

Despite the warning in the secret report by consultants Teneo, ministers decided that the job must be completed at the state-owned shipyard.

READ MORE: Ministers use new legal loophole to block reveal of ferry costs

A Scottish Government due diligence review supported by a secret analysis by consultants Teneo said it would be cheaper to scrap the ship still being built at Ferguson Marine and place a new order elsewhere. It is understood the Teneo report is subject of a non-disclosure agreement.

Scotland's ferry services have been dogged with issues with the delivery of the Glen Sannox and Glen Rosa vessels still not online after being due to be available for passengers in first half of 2018 when Ferguson Marine was under the control of tycoon Jim McColl. With both due to serve Arran, they are getting on for six years late and the last estimates suggest the capital costs of delivery could have more than quadrupled from the original £97m cost.

The wellbeing economy secretary Neil Gray gave a rare written authority in May to plough ahead with supporting the delivery of the two ferries at Ferguson Marine in May, saying it is the "platform upon which future success can be built".

It heralded the sanctioning of an extra £72.6m in capital spending on the ships. That was made up of £15m approved in December, last year and a further £57.6m for 2023/24.

Just before Christmas there was a further indication of further delay and extra costs on the ferries in a quarterly update by Ferguson Marine chief executive David Tydeman which was described as "extremely concerning" by the well being economy secretary.

Mr Tydeman has warned that they are facing "supplier issues" which is delaying the commissioning of the vessels' LNG propulsion systems.

A further delay would push back completion of Glen Sannox beyond its latest scheduled date of March, and would be expected to affect sister vessel Glen Rosa’s arrival on May 2025.

Now Edward Mountain, the convener of the net zero, energy and transport committee is demanding answers over the level of oversight of the disastrous project - as the costs continue to soar.

He has written to Mr Gray to ask him to detail how oversight of Ferguson Marine by government and its agencies is being practically carried out to "protect the taxpayer's ongoing investment.

He has also asked whether improvements to governance and project management that public spending watchdogs Audit Scotland and other parliamentary committees have said are necessary to reduce further delays and costs to the taxpayer have actually been made.

He also asked what actions the Scottish Government is taking to review and improve governance arrangements including his awareness of "potential risks to the budget and timescales for delivery of the vessels".

"The committee remains concerned that governance arrangements for completion of the vessels are still insufficiently robust to prevent further delay and increased costs," he said.

The MSPs have raised concerns that despite weekly meetings between Scottish Government officials and and Mr Tydeman issues over safety clearances of the two vessels did not become public knowledge until September, last year.

The problems related to the installation of the evacuation routes on the ferries in order to satisfy the MCA the Maritime and Coastguard Agency (MCA), which is responsible for implementing British and international maritime law and safety policy.

Mr Tydeman has admitted he knew about the problems within three months of him joining the firm in February, 2022. They sparked a redesign after the arrangements were rejected in June, last year.

It has been confirmed through Ferguson Marine project updates that issues with the escape routes were known about in April, 2022.

Mr Gray is also being quizzed about when the Scottish Government knew about the issues - which have resulted in extra costs and delays.

Ferguson Marine updates for April, 2022, show that it was known MCA approval was needed for escape routes.

Mr Gray is also being asked to when the Scottish Government was first aware of further issues with the availability of LNG equipment, that have sparked new concerns of costs rises and delays.

Mr Mountain has further raised issues with how legal loopholes had been used to block the release of vessel construction updates with those being published being heavily redacted.

The Scottish Parliament's Public Audit Committee has also been continuing to try to break down the confidentiality veil around the affair after the Herald revealed that the Scottish Government entered into ten gagging clauses with external private companies in relation to Ferguson Marine.

Ministers have come under fire for refusing to spell out the extra costings involved in continuing to complete the second of the two ferries which they admit is not value for money.

The Scottish Government has blocked information over the costs that led to to Mr Gray's written authority citing that it was exempt in terms of the Freedom of Information Act because its release would result in "substantial prejudice" to its commercial interests.

He said that non-delivery of the ferries at nationalised Ferguson Marine (Port Glasgow) would put the very future of the yard and the jobs it supports.

The public audit committee convener Richard Leonard has told Mr Gray that "there is no such caveat regarding commercial confidentiality in the Scottish Public Finance Manual for the publication of written authority."

The Scottish Government's stance over the blocking of information relating to the costs around the value for money assessment, has now changed. It is no longer relying on its previous stance that any publication would cause substantial prejudice to Ferguson Marine.

Instead, they are using another loophole that claims exemption because its disclosure would cause "substantial prejudice to the effective conduct of public affairs".

Mr Mountain has now joined Mr Leonard in trying to find out more about the costings that led to the written authority to go ahead with Glen Rosa.

A Scottish Government spokesman said: “When the Cabinet Secretary issued the written authority in May 2023, there was clear, cross-party acknowledgement this was the fastest possible route to getting lifeline ferries into service, along with broader social and economic benefits. Officials continue to scrutinise progress and have instructed FMPG to take every possible step to avoid further slippage in delivery dates and costs.

“The Scottish Government has received Mr Mountain’s letter and will reply in due course.”