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In effect, your report has not addressed the impact of contractor failure—I do not see that in your report. The Rural Economy and Connectivity Committee certainly raised the flag, so I would have thought that it would have been a priority to look at that issue. It is our public money that has been paid out to the company and, according to the evidence that has been given to this committee, it has not been paid out in the manner that it should have been. It has been paid out by CMAL, on the advice of its lawyers, according to the contract.

Some very strong statements are made in the report, most particularly in paragraph 160, which says that

“there is strong evidence that the contractor deliberately proceeded to construct specific sections of the vessel either out of sequence or not according to the proper specification purely as a means of triggering milestone payments on the contract.”

Evidence is given in paragraph 157 that work was carried out

“either incorrectly or out of sequence purely in order to trigger payments against the contract”.

Interestingly, too, paragraph 158 cites evidence that

“invoices presented were rejected on the basis they related to other projects”.

Given the committee’s evidence, it seems clear that it had great concerns about the contractor.

Paragraph 153 also highlights evidence that CMAL’s lawyers “advised” that it

“had to make the payments”—[Official Report, Rural Economy and Connectivity Committee, 11 March 2020; c 50.]

that were called for, because that was in the contract and it did not want to break the contract. Moreover, on subcontractors, paragraph 154 cites the statement that

“Ferguson’s deliberately slowed down some of that subcontracting.”—[Official Report, Rural Economy and Connectivity Committee, 5 February 2020; c 11.]

Maybe I have missed something, but I do not see anything in your report that addresses that issue directly. After all, this is very serious indeed. If the Rural Economy and Connectivity Committee’s conclusion is correct, the question, then, is: what action needs to be taken?

My simple question to you is: where did all the money that was paid in go? What was it spent on? It was not in the yard when the yard was nationalised.

There just seems to be such a big and fundamental gap in the overall picture. I am relying on the good work of the Rural Economy and Connectivity Committee, but I do not see where its work on the issue has been built on in Audit Scotland’s report in order to bring out that critical part of the picture. We can all argue about the contract—a huge amount of documentation has been online for some time in connection to that—but how will we address the issue of the failure of the contractor? That question mark is still sitting there.

In response to the Rural Economy and Connectivity Committee’s report, the Minister for Energy, Connectivity and the Islands highlighted that he felt that even that report did not reflect in full the

“contribution of the contractor’s non-performance, contract management and financial management, described in independent evidence”.

Why are we being so precious about this? If there is evidence that points to non-performance by the contractor that has contributed to charges on the public purse, and that applications for funding have not been made in the correct way, that should all be brought out and highlighted.

Okay. I have lots more questions, but I am happy to—

There is something I wish to point out before Nicola Dickie comes in. The Auditor General’s briefing is dated January 2022. I applaud the optimism in everything that the witnesses are expressing about collaborative work, but that is not being evidenced in what is coming before the committee. It will obviously take time before that work feeds through but, based on the evidence that the committee has seen, it is substandard, to be honest.

We have talked a lot about the contract and we can argue about its different aspects. However, contracts are only really there for when things go wrong, so that there is something to refer to. In this situation—again, I refer to the Rural Economy and Connectivity Committee report—it is alleged that the company did not act in the proper way in order to receive the correct payments.

As I say, contracts are there for when things go wrong, but, generally speaking, we do not expect things to go wrong. Generally speaking, delivery is made, there is good will and parties work together, but that has not taken place. There are a lot of questions around that, and the questions will get bigger and bigger. If you carry out an investigation to ensure that the contractor’s apparent failures are highlighted or explained—who knows, they might be explainable—that is where the big questions are.

Just—

That is in line with your letter to the committee. I assume that you would have reviewed the report as part of your audit process. Is that correct?

Leadership in the public sector is a concern that has been raised depressingly often. In this case, I draw the witnesses’ attention to paragraph 20 of the Auditor General’s briefing, which says:

“The health and social care sector needs stable and collaborative leadership to address the … challenges”.

There is also reference to the local government overview of 2020, which

“emphasised the critical need for effective leadership”,

which was absent. Also, the “NHS in Scotland 2020” report

“highlighted the continuing lack of stable NHS senior leadership, with high turnover and short-term posts.”

Those are serious issues. Leadership is vital but we often find that it is absent. We are considering the challenges that face social care, which seems to face exactly the same issues with leadership. Perhaps Caroline Lamb might comment on that and how it is being tackled.