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Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 8 July 2025
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Displaying 3298 contributions

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Public Audit Committee

Section 22 Report: “The 2021/22 audit of Ferguson Marine Port Glasgow (Holdings) Limited”

Meeting date: 27 April 2023

Richard Leonard

For us, as the Public Audit Committee, the question is not just about the fact that those things happened but that they were allowed to happen. Where was the sponsorship team and where was the Government’s oversight? To me, that seems to be a fundamentally important question.

Public Audit Committee

Section 22 Report: “The 2021/22 audit of Ferguson Marine Port Glasgow (Holdings) Limited”

Meeting date: 27 April 2023

Richard Leonard

I invite Willie Coffey to put some questions to you.

Public Audit Committee

Section 22 Report: “The 2021/22 audit of Ferguson Marine Port Glasgow (Holdings) Limited”

Meeting date: 27 April 2023

Richard Leonard

For the avoidance of doubt, the enterprise must comply with the Scottish public finance manual guidance, so there should be openness and transparency, there should be value for money and there should be an internal audit function, for example. My reading of the external auditor’s report is that FMPG did not have an internal audit function at the time of reporting. Is that still the case?

Public Audit Committee

Section 22 Report: “The 2021/22 audit of Ferguson Marine Port Glasgow (Holdings) Limited”

Meeting date: 27 April 2023

Richard Leonard

Again, I note that the reported cost for the FMI report is £200,000, is it not? There is also some concern about that report being covered by a non-disclosure agreement.

My final question goes in a slightly different direction. In the report, you highlighted the question of the demographic of the workforce in the context of the broader point about skills, and whether we are planning sufficiently to invest in the skills that we will need in future. To what extent, in your opinion, is the Scottish Government addressing what you have identified as a skills shortage?

Public Audit Committee

Section 22 Report: “The 2021/22 audit of Ferguson Marine Port Glasgow (Holdings) Limited”

Meeting date: 27 April 2023

Richard Leonard

Thank you. I will turn to a couple of areas. In paragraph 11 of your report—which, I think, is an amplification of a letter that the chief executive officer of FMPG that was sent to the convener of the Scottish Parliament’s Net Zero, Energy and Transport Committee—you highlight that the estimated costs for the Glen Sannox, or 801, are £101 million and that the estimated costs for 802 are £108.6 million. Why is 802 more expensive than 801?

Public Audit Committee

Section 22 Report: “The 2021/22 audit of Ferguson Marine Port Glasgow (Holdings) Limited”

Meeting date: 27 April 2023

Richard Leonard

That is fine. I suppose that the expectation would have been that the second vessel would benefit from lessons learned in the construction of the first vessel, which would lead to a reduction in the cost base.

Public Audit Committee

Section 22 Report: “The 2021/22 audit of Ferguson Marine Port Glasgow (Holdings) Limited”

Meeting date: 27 April 2023

Richard Leonard

So there is a possibility that there could have been a pre-emptive strike. The 2021-22 Scottish Government pay policy guidelines stipulated a minimum 2 per cent pay increase for public sector workers who were earning between £25,000 and £40,000, and it was 1 per cent for those who were earning between £40,000 and £80,000. The payment of a 17.5 per cent bonus was therefore, in anybody’s terms, a significant deviation from the Government’s pay policy.

Public Audit Committee

Section 22 Report: “The 2021/22 audit of Ferguson Marine Port Glasgow (Holdings) Limited”

Meeting date: 27 April 2023

Richard Leonard

I want to pick up on that point before I bring in Bill Kidd. To go back to the framework agreement, Joanne Brown, you said that it was 12 to 18 months in the making. On pay, the framework agreement talks about maintaining

“regular dialogue with the SG Finance Pay Policy on any proposals with an expectation that these will be broadly consistent with the provisions of SG Pay Policy and Staff Pay Remit. Any significant deviations will require further approval.”

Was that iteration in circulation at the point at which the turnaround director drafted a paper that was approved in February 2022, just a month before the framework agreement, including those clauses, was introduced? Was it a pre-emptive strike by the turnaround director?

Public Audit Committee

Section 22 Report: “The 2021/22 audit of Ferguson Marine Port Glasgow (Holdings) Limited”

Meeting date: 27 April 2023

Richard Leonard

You used—advisedly—the word “reviews”, plural. It is a little bit confusing, and perhaps in the realm of bewildering, that there could be more than one review with, presumably, broadly similar terms of reference. Aspects such as a business plan for the yard, what can be done to give it a sustainable future and what the market looks like are, presumably, part of the research that an organisation such as FMI would carry out. Why would there not be just one review to be signed off by both FMPG and the Scottish Government?

Public Audit Committee

Section 22 Report: “The 2021/22 audit of Ferguson Marine Port Glasgow (Holdings) Limited”

Meeting date: 27 April 2023

Richard Leonard

Auditor General, you spoke about ambiguity and the framework agreement not being as clear as it might have been. How should the sponsorship team’s relationship with an NDPB such as this be, when presumably not insubstantial amounts of public money—£10 to £15 million—need to be committed? Does it come as a letter of comfort at the end of the process or should there not be some kind of prior sign-off by the sponsorship team or the minister or whoever to allow the expenditure to be committed? We have heard that before in other circumstances around the contract.