Ferguson Marine Engineering Ltd

– in the Scottish Parliament on 15th June 2021.

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Photo of Paul Sweeney Paul Sweeney Labour

3. I refer members to my entry in the register of members’ interests, which shows that I am a member of the GMB union.

To ask the Scottish Government what its response is to the allegation made by Jim McColl in

The Herald on Sunday that £25 million of public money was wasted on the “forced” nationalisation of Ferguson Marine Engineering Ltd. (S6T-00069)

Photo of Kate Forbes Kate Forbes Scottish National Party

In the absence of a workable commercial solution, the administrators of Ferguson’s concluded that bringing the yard into public ownership was the best option. By taking control of the business, we were able to save Ferguson’s from the risk of administration, lift the threat of redundancy that was hanging over the staff and protect the local economy. I am sure that Paul Sweeney supports those objectives.

Photo of Paul Sweeney Paul Sweeney Labour

I share the objectives of saving and preserving industrial growth on the Clyde and the skilled jobs that go with that.

On 31 May 2017, Ferguson Marine’s chairman met the First Minister at Bute House and, on 5 June 2018, he met the former Cabinet Secretary for Finance and the Constitution to beg the Government to force its public body, Caledonian Maritime Assets Ltd, to take part in a dispute resolution process for the failing ferry contract.

On 9 November 2017, the Scottish Government appointed Commodore Luke van Beek to find a solution. The Government was given a report by Burness Corlett Three Quays in January 2018. A further report, by consultants HKA, was put to ministers in January 2019. All three independent expert consultants were highly critical of CMAL’s management of the ferry contract, so why did ministers ignore their independent advisers and refuse to intervene at any stage of that long process to oblige CMAL to participate in a dispute resolution process? That failure has led directly to the disastrous outcome that we see at Ferguson’s today.

Photo of Kate Forbes Kate Forbes Scottish National Party

Throughout the whole process, our commitment has been to ensure that the vessels are delivered. The Rural Economy and Connectivity Committee has completed its detailed scrutiny of the issues, and ministers have considered and responded to the committee’s findings. We remain committed to transparency and co-operated at every stage of the parliamentary inquiry. We proactively published large volumes of information on our website and, as and when requested, we provided evidence to the inquiry on the details that have been touched on by Paul Sweeney. Right now, our intention—we stand firm on this—is to ensure that the vessels are completed, the workforce is saved and the yard has a viable future.

Photo of Paul Sweeney Paul Sweeney Labour

We all share the cabinet secretary’s commitment to financial transparency and transparency of the decision-making processes.

When Ferguson Marine fell into administration in August 2019, as a direct result of ministers’ negligence in instructing CMAL to undertake arbitration, CMAL had the contractual right to claim a £25 million cash refund guarantee in the form of an insurance bond from specialist marine insurers, HCC International, which would have seen the insurance company take control of the shipyard. Instead, the Scottish ministers chose to forfeit the £25 million and to buy the shipyard outright at a further cost of £7.5 million. If the £32 million forced acquisition was not the alleged misuse of public funds and an attempt to cover up for the failures of CMAL and ministers that caused the collapse of the shipyard, as asserted by the previous management of Ferguson Marine, will the Government agree to release all correspondence between the Government, HCCI and CMAL?

Photo of Kate Forbes Kate Forbes Scottish National Party

Paul Sweeney has, in effect, rewritten history on two occasions in his question. It is totally incorrect to assert, as in some media reporting, that the £25 million that he has referred to has been lost from the public purse.

A judgment was made in the Scottish courts on 21 May 2021. The claim is on-going so I am rest ricted in what I can say, but, as is already widely known, because ministers proactively published extensive information to aid the parliamentary inquiry, an agreement was reached with HCCI to release it from a performance bond that it had provided for Ferguson’s.

Having seen the parliamentary inquiry proceed with extensive, transparent and proactive provision of information by ministers, the commitment is to ensure that vessels are delivered for the communities that rely on them, that the workforce is protected and that a viable future exists for the yard. I hope that all members will join me in trying to secure those objectives.

Photo of Stuart McMillan Stuart McMillan Scottish National Party

In addition to the challenges that remain, the cabinet secretary will be aware of the progress that has been made in the yard. Does she accept that taking the yard into public ownership was the only decision that would have saved it and the jobs in my constituency, as well as providing it with an opportunity to build ships for many years to come?

Photo of Kate Forbes Kate Forbes Scottish National Party

As the member has said, challenges exist, but our efforts saved FMEL from closure without a shadow of a doubt. Our actions rescued more than 300 jobs, ensured that the two vessels that are under construction will be completed, and secured a future for the yard. The work there includes the continuation of an apprentice programme that is crucial to the yard’s future and that of the shipbuilding industry in Scotland, and support for the local economy, which Stuart McMillan represents.

Photo of Edward Mountain Edward Mountain Conservative

The catastrophic mismanagement of the ferries contract that the Rural Economy and Connectivity Committee identified seems to continue to grow arms and legs. Tim Hare, whom the Scottish Government appointed, is paid in excess of £790,000 per annum, which is more than two and a half times the combined annual salaries of the Prime Minister and the First Minister. Who authorised that contract and why?

Photo of Kate Forbes Kate Forbes Scottish National Party

Edward Mountain knows more about FMEL than many do, because of the inquiry that the Rural Economy and Connectivity Committee conducted—an inquiry to which we submitted extensive and transparent information.

Our investment in the yard is indicative of the importance that we place on it and on the communities that rely on lifeline ferry vessels.

With regard to the turnaround director specifically, a benchmarking exercise was conducted as part of the recruitment process to identify market rates. The turnaround director’s agreed fee was well within the benchmark and consistent with market rates that reflect the highly specialised nature of a role that requires senior level experience.

I come back to the point that our investment in the yard is indicative of the importance that we place on FMEL and of our commitment to the delivery of those two vessels.

The Presiding Officer:

That concludes topical questions.