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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 4 May 2021
  6. Current session: 13 May 2021 to 5 November 2025
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Displaying 3464 contributions

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Public Audit Committee

Decision on Taking Business in Private

Meeting date: 27 April 2023

Richard Leonard

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.

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

Yes—we will let you move on, and you can come back to that.

My other question concerns the FMI report; I guess that I am asking you if you want to add to what you said about that earlier. Is the FMI report the report that has been commissioned by the Government and the yard? Is there other work going on? What is the synergy between the Scottish Government sponsorship team and the yard in developing a plan for a viable, long-term future?

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 am interested in shipbuilding skills.

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 have both spoken about the other income being small-scale. Can you give the committee an idea of what it is, as a proportion of the income that is going into FMPG? Is it 2 per cent, or 10 or 15 per cent?

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 very much indeed. We have run slightly over the time that we had anticipated, but it was important to draw out some of the important pieces of evidence that you have given us this morning.

As always, I thank you very much for your co-operation and frankness, which has been very helpful for us. We will, of course, need to determine what our next steps are but, for the moment, I thank the Auditor General, Mark Taylor and Joanne Brown for your candour this morning, which has been very valuable. I now move the committee into private session.

10:27 Meeting continued in private until 11:00.  

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

I have a couple of questions about the wider business picture and the future of the yard. I think that I can speak for the committee as a whole in saying that we ask these questions because we want the yard to succeed and have a long-term future.

The present management team is involved in an arrangement with BAE Systems. From memory of what we heard when we visited the yard, that does not just involve sending FMPG employees down to the BAE Systems yards in Glasgow; it is also about work being brought from BAE Systems to be carried out in Port Glasgow. In the report that we have before us this morning, you say that some cash-flow issues arose from uncertainties about the financial arrangement between BAE Systems and FMPG. Could you elaborate a bit more on what those uncertainties are?