PUBLIC finance auditors say there may need to be a further probe into why there remains missing evidence over why ministers took on the financial risk of Scotland's ferry fiasco contract.

Auditor General Stephen Boyle spoke has told MSPs there may need to be further inquiries over the affair after Nicola Sturgeon denied there was a Government "cover-up" over missing documents related to the award of the calamitous ferry contract which has seen two new lifeline vessels still out of service after six years and with costs spiralling to a quarter of a million pounds.

Audit Scotland has previously expressed "frustration" to MSPs over a failure to provide the key information over why ministers decided to proceed with awarding the controversial £97m order to Ferguson Marine without mandatory full refund guarantees from the shipbuilder.

In the years since the contract was awarded, the yard has been saved from administration by the Scottish Government, and the estimated delivery of two vessels has been pushed back by at least five years, along with an increase in costs to at least £250 million.

The Glen Sannox and the as-yet-unnamed Hull 802 are now expected to be completed between March and May 2023 and between October and December 2023 respectively.

Last week Ms Sturgeon denied there had been a cover up and said that "anybody can go on to the Scottish Government website and see the sheer quantum of paperwork and recording of decisions around this issue.”

She added: “There is clearly a key point of decision making that has not been recorded in the way it should have been. That is regrettable, but there is no cover up around this."


The First Minister also said there was no suggestion from the Auditor General that information over the decision to award the contract in October, 2015 had been withheld from Audit Scotland.

Earlier this week, Scottish Conservatives' shadow transport secretary Graham Simpson expressed frustration at a failure by business minister Ivan McKee to adequately answer questions over the transparency row in the Scottish Parliament while he described the debacle as "institutional corruption on a grand scale".

Mr McKee had continued to repeat the Scottish Government line that they have been "absolutely transparent" about the decision making process and the information which informed those decisions.

Mr Boyle said they were so far unable to say which minister gave the approval to award the contract to the Jim McColl-led Ferguson Marine without mandatory safeguards but continued to insist there was insufficient documentary evidence over the decision making.

Papers show that justice secretary Keith Brown - who was infrastructure secretary in 2015 - was asked to sign off Ferguson Marine's status as preferred bidder.

But that was before concerns were raised by the government’s ferry procurement body, Caledonian Maritime Assets Limited (CMAL) over the lack of financial guarantees that placed them at risk and before the contracts were finally signed.

Mr Boyle told the Scottish Parliament's public account committee that he was unaware of any direction given to improve the quality of its record keeping on major decisions and said MSPs may which to pursue that with the government.

He also said that they may need to make a new inquiry over the 'missing' documents.

Mr Boyle said it was part of their forward thinking to carry out a "fuller and next stage review" over what has been delivered in terms of public spending of the vessels and a "need for an understanding" over what has been produced from the "vast sums of public money" pumped into the ferries project.

Committee deputy convenor Sharon Dowey suggested there had been a "systemic failure of the government to record crucial information" and asked if any further actions had been taken to ensure all ministers and civil servants ensure that minutes and evidence of meetings are recorded.


And Mr Boyle responded: "I'm not aware of any further directive from senior respect of the quality of record keeping or the importance of it.

"That's not to say that that's not been happening or that there hasn't been internal communication within the Scottish Government to that effect. But again, it may be a line of inquiry the committee wishes to pursue with the government.

Mr Boyle indicated that while there was no obvious ministerial direction or written authority requested from civil servants, the accountable officers of ministers it was clear that ministers were ultimately responsible for approving the contract.

Asked if Audit Scotland had asked the accountable officer which minister had approved the contract, Mr Boyle said: "We are not in a position to answer that today."

He added: "In respect of which minister took the decision, we are referring collectively that it was a ministerial decision, so we are not sighted today and I suspect not sighted entirely as to which minister took that call."

He accepted the decision process was a "complex and disputed chain of events" and added that it has not led Audit Scotland to a place that we've been able to "fully piece together that very important final step prior to the award of the contract, and ministerial consideration of how they would accept the risks and the final award to Ferguson Marine".

He added: "We were advised that ministers were content to proceed, cognisant of the risks that existed, so I'm not sure we're able to confirm that there was documentary evidence in place.

"I know the government's explanation that they've searched and are unable to locate it. But I think we are unable to be in a position to say whether the document did or didn't exist.

"We've probably gone as far as we're able to, and it may be a line of inquiry that the committee wishes to pursue with directly with the officials involved."

Mr Boyle, however, earlier insisted there was "insufficient documented evidence" to explain why Scottish ministers accepted the risks of the 2015 contract.

"It is absolutely the case that there is plenty of documented evidence surrounding the contract, the procurement arrangements and subsequent events that have taken place.

"What we're pointing to... is that final step between CMAL through Transport Scotland, highlighting that there were risks in the award of the contract, that it was non-standard in respect of the availability of a full 100% of the builders' refund guarantee, but that the confirmation came back from ministers that they were content to accept those risks and award the contract to Ferguson Marine.

"We say there's a missing piece of evidence convener about that final important step about how ministers arrived at that decision towards the overall contract to Ferguson in light of those unusual circumstances.

"Since the evidence session last week, the Scottish Government has confirmed that they've been unable to find the relevant documentary evidence upon which they made that important decision."

It has been suggested that the transparency failure was a breach of the Public Finance and Accountability Act.

The Herald on Sunday revealed that taxpayers lost over £80m after ministers provided a £106m special incentive to ensure that the contract could go through without the normal financial safeguards from the shipbuilder.


The deal was set up to ensure the ferries contract was given to Ferguson Marine in October, 2015, to reassure CMAL who had "severe misgivings" over the yard's inability to provide builder's refund guarantees were not out of pocket if anything went wrong.

Ministers approved a £106m public money loan with special provisos to CMAL to protect them and would normally have been expected to pay off the loan over 25 years using revenue it generates from the fees they get from the lease of vessels like the ferry fleet of state-controlled ferry operator CalMac and harbour access charges.

But the £82.5m that had been drawn down from the loan became a taxpayer loss as CMAL says it was "eliminated" after Ferguson Marine went into insolvency.

Ministers have previously rejected the "catastrophic failure" conclusion of a previous MSPs inquiry into the procurement of the ferries.

The 129-page rural economy and connectivity committee report two year ago, called for a “root-and-branch overhaul” of the ferry procurement process, declaring that established procedures are “no longer fit for purpose”.

The first ferry was meant to enter service on the Arran route in the summer of 2018 but is not expected to be ready until next year at the earliest - five years late. Hull 802, destined for an Outer Hebrides route, has gone the same way. The latest estimated cost for both ships is at least £250m off an original fixed contract price of £97m.