Seòmar agus comataidhean

Good morning. I welcome everyone to the 12th meeting in 2023 of the Public Audit Committee. The first item on our agenda is a decision on whether the committee will take agenda items 3, 4, and 5 in private. Do we all agree to take those items in private?

Members indicated agreement.

Thank you very much. I will begin by going back to what has been a recurring theme in relation to the delivery of those two vessels, which is cost overruns. In particular, I want to ask about paragraph 13 of the report, in which you draw attention to the fact that, during October to mid-December 2022, Ferguson Marine Port Glasgow made expenditure commitments of between £10 million and £15 million more than the Scottish Government had allocated. I guess the obvious question is: how could that be? Was it appropriate, and where was the sponsorship team of the Scottish Government during that?

Auditor General, you couched the situation in terms of there being a tension between the fact that Ferguson Marine is a company limited by guarantee and that some of its governance is dictated by the Scottish public finance manual. There was a report in a national newspaper today about the commissioning of some consultancy work to scope what needs to be put in place for the company to thrive in the future. The article suggests that the organisation that is carrying out that work—First Marine International—requested a non-disclosure agreement on its report. Initially, the Scottish Government said that there was no NDA, but it has now accepted that one is in place, and there is talk about commercial sensitivity.

We all understand that there will be some commercial sensitivity, but there is also a public interest, and there must be a way through that that would allow as much as possible of the report to be in the public domain and subject to scrutiny. Are you aware of that and do you have any reflections on it?

Thank you. That is a very clear message.

Craig Hoy wants to bring up further related matters.

We have received apologies from Colin Beattie. I welcome Bill Kidd to the committee.

Thank you very much indeed. You mentioned the committee’s priorities, so I am bound to ask this. Last week, we published a report on the construction of ferries 801 and 802. In that report, we made some recommendations on work that we thought that it would be useful to be included in your work programme, recognising that we cannot instruct you to do anything. Those recommendations were about the procurement of the vessels and what we thought would be a useful forensic analysis of the money that was paid over to Ferguson Marine Engineering Ltd. Have you had any time to consider that? How do you plan to give that consideration?

Secondly, on a broader point, something that is not explicitly mentioned in the work programme papers that we have seen is the discussion about the business investment framework that was published last year by the Scottish Government. The committee has some ideas about how that could be improved, and we have had some useful discussions in public evidence sessions with you about that, especially around the Scottish Government’s consolidated accounts.

Could you give us some reflections on those points?

Thank you very much, commissioner. I think that our working list had 22 recommendations, with a breakdown of 10 that had been implemented at the time of the Audit Scotland report’s publication, and 10 being a work in progress. I am sure that during the course of the next hour we will get into some of the detail of the recommendations and the progress that you have made. If you have reconfigured them, maybe we will get to the bottom of that, too.

I go first to Willie Coffey, who has an extremely important question that exercised us very much at our last session with the Auditor General.

I am sorry to interrupt, Mr Bruce, but what is the AAB?

That is very helpful.

I want to take us on to a matter that you have previously spoken about and informed us of. It is one that not only the current committee but our predecessor committee in the previous parliamentary session identified as being extremely important. We get section 22 reports, for example, which contain recommendations, but because, the following year, a follow-up section 22 report is not produced on that organisation or public body, we lose track of what happens to the recommendations.

Therefore, we would value the ability to have oversight and continuity of interest. I recall that you said that you also saw that as being important, and that you were in discussions with the Scottish Government about establishing some kind of framework that would allow that to become a routine outcome of the audit work that you do and the reports that you present. From memory, December 2022 was mentioned as the date by which you hoped to be finalising that process. Could you bring us up to date with where things are with that framework? Are you taking any other steps to address that issue of being able to follow through on and keep track of recommendations that you and your auditors have made, which is, by common consent, a deficiency?

As I mentioned, Roz McCall has questions on particular aspects of some of our longer-term areas of interest.