Seòmar agus comataidhean

Thank you very much, convener. I appreciate the opportunity to provide the committee with an update in relation to the written authority that I provided in May to secure the continued build of vessel 802 at Ferguson Marine Port Glasgow.

During the meeting of the committee on 1 June, when the director-general economy was in attendance—as well as in the recent Public Audit Committee debate on 8 June, which I responded to—it was clear from the outset that the committee was interested in the process of written authority, as the steps that a minister takes in that regard have not been taken in quite some time. The process is rare in Scotland, so I am of course more than happy to discuss the detail of it during this session.

As part of the process for providing written authority, I was satisfied that the accountable officer—in this case, the director-general—scrutinised and interrogated the projected costs that FMPG provided and assessed those costs against alternative options. That work followed an independent assessment of the assurance work to test the underlying assumptions and robustness of the data on the estimated cost to complete vessels 801 and 802.

To be clear, if the written authority to complete vessel 802 at Ferguson’s were not provided, we could be looking at a delay in deploying a new vessel to May 2027 at the earliest—four years from now and two and a half years after 802 is due to be delivered. As I advised at the time, I do not consider it acceptable to ask our island communities to wait that further period, and I continue to stand by that.

Although the impacts on our island communities and on our economy are not covered by the value-for-money assessment, they have guided the decisions that I have taken, which recognise the broader social and economic benefits of completing both ferries and ensuring that the yard continues to have a strong platform on which to progress and prosper. I remain committed to supporting a sustainable future for Ferguson Marine; providing written authority confirms the Scottish Government’s intention to deliver vessel 802 at the yard and provides a platform on which future success can be built.

As you have said, convener, I am joined by Colin Cook and Kate Hall, and we look to answer any questions that you have in your scrutiny of the process behind the latest written authority that I provided.

To be clear, I do not think that that characterises the director-general’s statement appropriately. We considered whether anything could be released, and it was decided that the report and its contents were commercially sensitive and that releasing the report would put the competitiveness of the yard at risk, so it would not be appropriate for us to release it.

We have to publish them. The Scottish public finance manual sets out how the accountable officer must go through that process. I believe that the previous written authority was in 2007, but there have been numerous such decisions at a UK Government level during that time. I am happy to furnish the committee with more details in my correspondence with the convener on the timeline, which I spoke about earlier.

Such decisions are a rare occurrence in Scotland. I am pleased that that is the case, and I hope that they will not be required routinely, as they are elsewhere. Given that they are so rare, I understand the committee’s interest in how the written authority came about, which is why I am more than happy to be here today and to provide as much information as I can about the process that was gone through to arrive at that decision, so that the committee can have confidence in that regard.

No.

I will bring in Colin Cook to comment on the particulars of that figure. The future of the yard will depend on ensuring that it is productive and competitive. Some of that work will require difficult decisions to be made about the future nature of the yard, including the capital investment that will be required to bring it up to competitive standard. A request has come in from the chief executive for work that he believes is required to bring it up to standard, and we must go through a rigorous process of ensuring that we are in line with subsidy control measures to take that decision—something that both the convener and I mentioned during the debate.

I bring in Mr Cook to provide further detail on the figure of £120,000.

There is undoubtedly a requirement to do more. The request that I mentioned earlier has come in. From a subsidy control perspective, we have to assess whether that work would be forthcoming if the yard was in private ownership, and whether, by our providing it, we would be providing a subsidy or a competitive advantage to the yard that it would not have in the private sector.

That work is on-going, but, undoubtedly, work is required to ensure that the yard is competitive going forward. That is where some of the difficult decision making will be over the coming months in terms of ensuring that the yard is in as fit a position as possible to ensure a good future.

In relation to what we are discussing today, I took a decision on 14 May and made a statement in Parliament on 16 May—the next parliamentary sitting day. I hope that that gives some comfort to Mr Coffey and his colleagues that I am committed to providing information as quickly as possible to ensure that there can be public scrutiny and that this committee can discharge its duties as effectively as possible. We will seek to put information into the public domain as quickly as we can.

I do not need to respond to you in writing, then. [Laughter.] Ms Hall has assisted me by saying that it will take £70 million to complete 802.

No—and I have said why, convener. I hope that it would be understood that, by releasing the report, we would be putting the yard at a competitive disadvantage. Yards—

To be clear—I hope that I am not putting words in Mr Irwin’s mouth—I do not think that that was a decision that was requested because there was advice against proceeding in that direction from colleagues in the Government. The decision was made because Mr Irwin could not be satisfied, based on the economic uncertainty, inflation, the other elements of information that were available and the direct cost comparison between completing and procuring elsewhere, on that narrow value-for-money element.

Mr Irwin was satisfied on the other two elements—on the appropriateness of our proceeding—and I think that that has been set out to the committee. However, no, we are not able to release the report, as I have said. We hold very dear the future of the yard, and we want to ensure that that is protected, as I am sure that you understand, convener.