When the then Rural Economy and Connectivity Committee published its report on the construction and procurement of ferries in Scotland in December 2020, it concluded that there had been
“a catastrophic failure in the management of the procurement of vessels 801 and 802, leading it to conclude that these processes and structures are no longer fit for purpose.”
That was no small claim from a cross-party committee, and one that should have made the Scottish Government and all its agencies sit up and take notice.
The committee called on the Scottish Government to commission an independent external review of the processes for public procurement of ferries. The Government did so. That report, “Project Neptune”, has been completed by Ernst & Young and is being sat on by Transport Scotland. Jenny Gilruth promised to publish it when I asked her about it last month, yet Transport Scotland continues to get its way. We demand that it be published in full immediately.
The Rural Economy and Connectivity Committee also called for the management of the ferries contract and the role that was played by Transport Scotland to be reviewed by Audit Scotland. That review has taken place and its conclusions, which have been published today, are damning. I will start with that, but I will also deal with the wider issues because at the heart of the matter is the fact that the Scottish National Party Scottish Government is letting down islanders and those who need to get to islands. That cannot go on.
Today, the Auditor General has been scathing in his criticism. His report lays bare the shambles of the contract to build the two ferries. Ministers were warned not to give the contract to Ferguson’s. The cost is two and a half times the original budget, and ministers are tied into paying whatever it takes. The cost could go higher—it has done today, by £8.7 million, which is not a drop in the ocean. There are major failings at the shipyard that still need to be resolved. The Auditor General’s report leaves the SNP holed below the waterline when it comes to its record on ferries.
Today, Stephen Boyle said:
“The failure to deliver these two ferries, on time and on budget, exposes a multitude of failings. A lack of transparent decision-making, a lack of project oversight, and no clear understanding of what significant sums of public money have achieved. And crucially, communities still don’t have the lifeline ferries they were promised years ago.
The focus now must be on overcoming significant challenges at the shipyard and completing the vessels as quickly as possible. Thoughts must then turn to learning lessons to prevent a repeat of problems on future new vessel projects and other public sector infrastructure projects.”
Of course, the Auditor General’s report says what we already know—that the project to deliver the two new ferries has been fraught with problems and delays over six years. Vessels 801 and 802 were originally expected to be delivered in May and July 2018 respectively, but they are now almost four years late, and we have heard about a further delay.
The total cost of the project is currently estimated to be at least £240 million—that was confirmed earlier—which is two and a half times the original vessels’ budget, and there is apparently no limit to the final cost, despite what the cabinet secretary said earlier. According to the report, the Government is committed to paying any extra costs
“regardless of the final price.”
The Scottish ministers announced Ferguson Marine Engineering Ltd, which I will refer to as FMEL, as the preferred bidder for the £97 million fixed-price—“fixed-price”; if only!—contract to design and build the two vessels in August 2015.
The contract notice for the design, construction and delivery of the vessels was advertised in October 2014. We have been told today that both boats will be delivered next year. Even if that is true, it will have been nearly 10 years in total by the time they take passengers. We have designed and built rockets to take us to the moon and back more quickly than that.
The Auditor General says that, in September 2015, FMEL confirmed that it was unable to provide Caledonian Maritime Assets Limited—CMAL—with a full refund guarantee, which was one of the mandatory requirements of the contract.
Although CMAL subsequently negotiated a partial refund guarantee with FMEL, it remained concerned about the significant financial and procurement risks that that created. CMAL had the option to reject the bid at that point, and it told Transport Scotland that it wanted to restart the procurement process.
Transport Scotland alerted Scottish ministers to CMAL’s concerns and to the risks of awarding the contract to FMEL. The Auditor General says:
“There is insufficient documentary evidence to explain why Scottish ministers accepted the risks and were content to approve the contract award in October 2015.”
CMAL thought that there were too many risks to award the contract, but the Government thought that it knew better. Why, when the Ferguson’s bid was the highest, and when the Government’s ship-buying arm said no, did ministers plough ahead? I asked the cabinet secretary that question earlier, but I got no answer.
I say to Mr Gibson that ministers should listen to the experts. Perhaps if they had listened, we would not be in this mess, and we would not now be ordering ferries from Turkey.
There was then the £45 million loan to FMEL; we do not know what good that did. As things went belly up, the Government decided to nationalise the yard, but it had absolutely no idea what the condition of the boats was when it did so, so it could not have predicted how costs would rise.
Despite advice from PWC, there was no exit strategy—a bit like the situation with Prestwick airport. That is scandalous. Throughout the process, the various parties have been squabbling like children, unable to get on. There have been a string of disasters, with the latest being the discovery that the cables that were fitted on the vessel that was launched with blacked-out windows by Nicola Sturgeon in 2017 are now too short.
No one has accepted blame for that, or for anything in this fiasco. Ministers and others—including the highly paid and mistitled turnaround director—have moved on, but nobody’s head has rolled. That is the problem. There is no accountability—none—not just in Ferguson’s, but in the entire ferry system and especially in Government. To get to the bottom of that, we need a public inquiry.
There is a telling sentence in the Audit Scotland report, which states:
“The two new vessels, and subsequent additions and disposals, were expected to reduce the average age of CMAL’s major vessel fleet from 21 years ... to 12 years by 2025.”
How are we doing on that? The average age of the CalMac Ferries Ltd fleet is 23 years. The situation has got worse, and nobody’s head has rolled. We need new ferries, and we need to increase the budget for that in order to catch up. Graeme Dey reckoned that it would take £1.5 billion over 10 years; we are saying that it requires £1.4 billion. That would create a pipeline of work that could herald a boost for Scottish shipbuilding.
This is not some obscure topic. Having an ageing and unreliable ferry fleet affects people’s lives. This week, I have been speaking to island campaigners on Arran, Mull and Iona. A psychotherapist told me that he is dealing with increasing numbers of stressed-out patients. Other people have said that they have not been able to get to hospital appointments, because they cannot book a car space less than a few weeks in advance. The situation is also affecting tourism.
I have heard of bare shelves in shops, and I have seen the photographic evidence. Farmers cannot get feed and cannot get their animals to market. It goes on. Kids cannot get to school. People are thinking of giving up island life altogether—under the SNP.
I just said that. People are now thinking of giving up island life altogether. That is tragic.
I will end with a personal testimony from a lady on an island that I have not mentioned so far: Cumbrae. She told me:
“We are only an 8 minute journey from the mainland and this nearness, and our small size, results in a heavy reliability on the mainland. We do NOT have the infrastructure on the island that other islands have. Residents require to travel to the mainland for secondary schooling, work, medical, dental, optical and veterinary services, as well as supermarket food shopping and PETROL! The service in recent months has been the worst in living memory. I am aware of a lady who missed a mastectomy operation due to a sewage issue on the ferry and at least 2 other ladies that have had their Chemotherapy impacted. We need a solution now!”
I disagree with that lady. We needed a solution long before now.
That the Parliament believes that islanders, island economies and all those reliant on vital ferry links are being severely let down by the failure to deliver a resilient ferry fleet; calls on the Scottish Government to increase funding to build new ferries in the next five years and to commit to spending £1.4 billion in the next 10 years in order to bring down the average age of ferries and to upgrade ports; is deeply alarmed and disappointed with the late arrival of new operational vessels for the Clyde and Hebridean routes; understands that the construction of vessels 801 and 802, which were due to be delivered in May and July 2018 respectively, are severely delayed; notes with disappointment that the Scottish Government has yet to confirm a revised timetable for the completion of vessels 801 and 802, following the identification of issues with the cabling; believes that the Scottish Government has made insufficient progress on acting on the recommendations set out in the report by the Rural Economy and Connectivity Committee, in Session 5, on ferry construction and procurement; calls upon the Scottish Government to publish an unredacted copy of the Project Neptune report compiled by Ernst and Young, and further calls for a full public inquiry into the Scottish Government’s failure to renew the ageing ferry network based on a workable ferries plan.
I thank Graham Simpson for securing this important debate on Scotland’s ferries, which is timely, given the Cabinet Secretary for Finance and the Economy’s statement on the Audit Scotland report this afternoon.
It is necessary that, as transport minister, I listen to the Opposition and engage collaboratively on the best way forward. Mr Simpson and Mr Bibby know that I am adopting that approach to public ownership of Scotland’s railways, so it will not surprise either of them that it is in that spirit that I intend to make the changes that are required to build resilience in our ferry fleet and to provide reassurance to our island communities.
I know that for our island communities, our ferries are not just boats: they are lifeline services that bring food and vital supplies. They facilitate onward journeys to family and essential hospital appointments, as we have heard. They are a bridge across our sometimes tumultuous seas and it is vital that the Government—where it has responsibility and accountability—gets this right for people who live on our islands.
I want, therefore, to start with an apology. I am sorry that, this winter, islanders have not been provided with the services that they deserve and to which they should have access. I am sorry that their needs have not always been fully met. I am sorry that when things have gone wrong, islanders have often not always been communicated with appropriately or in a timely fashion.
I am acutely aware of the need for Government—and CalMac—to improve in that regard. Although I cannot wave a magic wand and make our fleet more resilient overnight, I am intent on delivering a better service. Working with our island communities, I will explore every possible avenue to do just that.
I have heard loud and clear the concern and difficulties that have been faced in the recent prolonged period of disruption. It is important to reflect on the combination of an unprecedented series of named storms and the considerable disruption on the network resulting from the impact of the pandemic.
On weather, when I say “unprecedented”, I note CalMac’s own observation that there was more weather disruption in the first seven weeks of 2022 than there was in the whole of 2012. In much the same way as it is impacting on our railway network, climate change is impacting on our seas and our ferry fleet. Indeed, weather and Covid-related incidents combined accounted for 92.75 per cent of the disruption that was experienced in January and February alone. Although it is important to note that those disruptions were caused by factors that are outwith our control, the impact of extended maintenance requirements and breakdowns, which were due in part to the age of the fleet, must also be addressed, so I will come to that shortly.
I will come to that shortly. I have already given Mr Simpson an assurance that it will be published in due course.
Although I note the undeniable challenges that are faced by Scotland’s ferry fleet, I want to express my on-going thanks to the crews and staff of CalMac, who have been working hard in extremely challenging circumstances. I am sure that members from across the chamber will join me in expressing that sentiment. As the Government amendment notes, that includes commending
“the vessel masters for the key role that they are trained to play in ensuring people’s and vessels’ safety with the decisions that they make about how and when ferries can sail”.
Regardless of the reasons for cancellations, the impact on communities is clear, whether we are talking about lack of fresh produce in local shops or missed hospital appointments on the mainland. We must do everything that we can to avoid or mitigate service cancellations on the network.
I appreciate the tone of much of what the minister has said about accepting the need for more responsiveness on the part of CalMac and CMAL. Does she agree that both organisations would be more responsive to communities if any of their board members had to use a CalMac ferry in their daily life?
I recognise Dr Allan’s interest in the matter, given his constituency. I am broadly sympathetic to his suggestion, but I do not want to make a decision on it right now, in the chamber. I recognise the challenges to do with getting islanders’ voices to inform the work of CalMac.
I want to talk about services that have been impacted. We heard about services to Arran, and I am well sighted on the difficulties on Barra, Cumbrae, Coll and Tiree. I will meet CalMac next week, following our initial meeting last month, to raise concerns directly and seek an action plan for improvement. I make an offer to members who would like me to raise constituency cases with CalMac directly: I ask them to email my private office, and I will ensure they receive an update and an assurance from CalMac that their concerns have been adequately addressed.
I have asked CalMac for regular briefings regarding service cancellations. I have also requested, through officials, an up-to-date understanding of the approach to Covid on vessels and the impact that that has had. The issue has been raised with me.
There is, furthermore, a need for joined-up cross-portfolio work on resilience. With the Cabinet Secretary for Rural Affairs and Islands, I have set up work across Government to establish what more can be done to prepare better for known resilience events, by building on the already well-established engagement between Government and local resilience partnerships.
It is important to note that the age of the fleet has been a significant contributing factor in cases of breakdown or extended periods of maintenance or dry-docking. Ministers recognise the need to address delays in investment in ferries infrastructure, which is why we committed £580 million in the infrastructure investment plan.
I want to make progress, if Mr Bibby would allow me to do so.
The investment will enable delivery of improved infrastructure, including three ports on the Skye triangle, to bring greater resilience and allow a wider range of vessels to be used. It also supports delivery of the new Islay vessels and associated port improvements, with both elements allowing increased capacity alongside improved efficiency on the route. The Islay programme was developed following detailed community engagement, which led to a decision to invest in a second vessel.
We have also been able to use the investment to realise an opportunity to secure an additional vessel in the fleet—MV Utne, now MV Loch Frisa—following extensive worldwide searches of the market by CMAL.
I want to make progress.
The purchase of the additional vessel secures an island-focused year-round timetable, as was requested by the Mull community. It also frees up other vessels that can improve services to Skye and South Uist. The actions have been welcomed by local communities.
CMAL, Transport Scotland and CalMac continue to work with communities and key stakeholders across the network to develop the required projects to a point at which they are ready for investment.
I recognise that we have been criticised for not engaging early enough with communities on such decisions. I hope that the work that I have described demonstrates that we have made significant improvements to our approach—a point that the ferries community board noted with reference to the Islay vessel experience.
I would like to make progress.
Since 2007, our investment in ferry services has exceeded £2 billion, to provide new vessels and improved infrastructure and to underpin our Clyde and the Hebrides and the Northern isles ferry services.
Since the ferries plan was published in 2012, we have seen the addition of new routes, including to Campbeltown and Lochboisdale, as well as significantly increased frequency of sailings on routes to Arran and Mull.
The islands connectivity plan offers the Government—and, I think, the Opposition—the next opportunity for greater delivery for our island communities. The ICP will be published later this year and will replace and enhance the current ferries plan. It will build on the ferries plan’s progress and will refresh the strategy that guides the ferry services for which the Scottish Government is responsible. When it is published, it will cover a long-term investment programme for ferries and ports, which will aim to improve wider resilience. Engagement is already under way on it—
I would like to make some progress.
Discussions took place this morning with stakeholders from both networks. I again wish to provide the Opposition with an opportunity to feed into the ICP’s development, as was the case on rail, and I would welcome the chance to speak directly to party spokespeople.
I am aware of the time—I think that I have 10 seconds left.
That discussion could better ensure a collaborative approach, going forward.
I assured Mr Kerr that I would come to “Project Neptune”. As part of our drive for strategic improvement, we commissioned an independent review—which was alluded to by Mr Simpson—of the current legal and governance arrangements for the existing tripartite of Transport Scotland, CMAL, David MacBrayne and its subsidiary, CalMac Ferries Ltd, which currently operates the Clyde and Hebrides ferry services, or CHFS, network.
As Mr Simpson knows, I have committed to making a statement to Parliament to that end. I received the report from officials late last week and, along with the relevant Audit Scotland recommendations, we will now consider options for reform and improvement. “Project Neptune” potentially offers options for structural changes to how we deliver some elements of our ferry services.
Given the complexity of that and given what each option might mean for the bodies and staff involved, I will not set out the detail of that today, but I want to reassure members that I will be launching further engagement with key stakeholders on those options, following a statement to Parliament, as was previously committed to.
I recognise the vital importance of Scotland’s ferry network to our island communities. It is imperative that the Government gets it right—and that it is honest when we do not. As Minister for Transport, I am absolutely committed to listening to the needs of our island communities and acting to make the improvements that are necessary.
I move amendment S6M-03712.2, to leave out from “believes that islanders” to end and insert:
“agrees that ferry services provide an essential lifeline to island and remote rural communities and their economies; recognises that, through adverse weather events and COVID-19 causing many cancellations on the Clyde and Hebrides Ferry Services routes, this has been a challenging winter for island residents, businesses and communities; commends the vessel masters for the key role that they are trained to play in ensuring people’s and vessels’ safety with the decisions that they make about how and when ferries can sail; acknowledges that technical issues causing some vessels to be further laid up have added to people’s frustrations and inconvenience; notes that, since 2007, over £2 billion has been invested in service contracts, new vessels and infrastructure and that, in the current five-year period, a further £580 million has been committed, enabling harbour investments, two new vessels for Islay to be built and the purchase of the MV Loch Frisa; further notes the Scottish Government commitment to publish the Islands Connectivity Plan by the end of 2022; welcomes that the Scottish Government saved Ferguson Marine, the last commercial shipyard on the Clyde, from closure, rescuing more than 300 jobs and ensuring that two new ferry vessels will be delivered, while noting the planned revised timetable and costs for completion of these two vessels; condemns the recent actions by P&O Ferries in the strongest possible terms, and makes clear the Scottish Government’s support for P&O Ferries employees, and agrees that ‘fire and rehire’ practices should be outlawed and have no place in a fairer, greener Scotland.”
At the outset, I welcome the Scottish Government’s reference in its amendment to the situation at P&O Ferries. Labour MSPs, whether here in Parliament today or earlier at Cairnryan, stand shoulder to shoulder with the workers and their unions, the National Union of Rail, Maritime and Transport Workers—the RMT—and Nautilus. P&O executives have behaved utterly disgracefully and should be hunted down to the full extent that the law allows. The situation should never have been allowed to happen and, as Labour’s front bench in the House of Commons has made clear, it would not be happening if there was a Labour Government. P&O executives must be held accountable for their actions.
Speaking of accountability, I welcome this afternoon’s debate, led by Graham Simpson. The ferries fiasco is one of the biggest issues facing Scotland today, and it is one that the Scottish Government has been dodging for too long. The ship has sailed on the SNP’s excuses. Scotland’s ferries fiasco is a national humiliation. A Scottish yard supporting Scottish jobs and owned by the Scottish Government has failed even to make the shortlist to build ferries in Scotland. It is a national humiliation that has serious and profound local consequences.
Reliance on an ageing CalMac fleet means that islanders have to endure the human cost of breakdowns and delays, with young people missing school, sick people missing hospital appointments, families being kept apart and island businesses losing incomes. We have all seen the pictures of island supermarket shelves lying empty. All those things are threats to island life, as Graham Simpson said. The situation undermines efforts to reverse depopulation, and it damages fragile island economies.
Islanders who are waiting on new vessels on the Clyde and Hebrides routes—vessels that are already four years behind schedule and two and a half times over budget—deserve a profound and meaningful apology from the Government for its failures over the past 15 years. I welcome the fact that the Minister for Transport had the grace to apologise for the disruption this winter.
There must be concerted action from the very top in order to put the matter right. There was a time when senior SNP politicians could not get themselves down to Port Glasgow quickly enough to have their photo taken; now, they cannot run away quickly enough from their responsibility for the shambles. Earlier, Willie Rennie and I both asked the Cabinet Secretary for Finance and the Economy whether she would stake her position on timely completion of the new vessels. She refused to do so on both occasions. Perhaps the Minister for Transport will take responsibility instead. If not, it is clear that nobody in the Government will take responsibility.
In fact, there has been a ministerial merry-go-round throughout the fiasco. Alex Salmond was down there in 2014. Derek Mackay had his photo taken outside the yard in 2017. Nicola Sturgeon launched a ferry with painted-on windows that was still unfinished. Fiona Hyslop fell out with the union. Michael Matheson, Humza Yousaf and Graeme Dey have all come and gone—unlike the boats—and last week Ivan McKee was answering questions on the issue. Today, Kate Forbes gave the statement and Jenny Gilruth has spoken in this debate. The previous owner is away and the turnaround director is away.
The one constant throughout has been the First Minister, and the First Minister is ultimately accountable for the Scottish Government. That is why Scottish Labour is calling for the First Minister to assume direct ministerial responsibility for the Government’s investment in Ferguson’s: no one else is taking responsibility. Nicola Sturgeon needs to lead from the front, turn Ferguson’s around and bring her Government’s ferries fiasco to an end. That means the Glen Sannox being fully operational with no more delays, followed by vessel 802. The completion of those vessels is essential to rebuilding confidence in Ferguson’s and helping the yard to bid for new work.
On the question of confidence in Ferguson’s, let me say this: today’s Audit Scotland report will make for difficult reading for many people. Ultimate responsibility lies with the Government, but there is plenty of blame to go around.
There is no question, however, about the dedication and professionalism of the Ferguson’s workforce. It got on with the job as best it could in extremely difficult circumstances. It deserves better and needs to know that the Government is committed to completing the vessels. It needs assurances that the new management set-up will make the yard more competitive and bring new opportunities to the lower Clyde.
Our appeal to the Government is that it complete the ferries and ensure that the yard can bid for new work. That must include the opportunity to be part of a much-needed ferry building and replacement programme. We need to build more ferries, but since 2007 this Government has built only six new ferries in 15 years, compared with the 10 new ferries that were built by the previous Labour and Liberal Democrat Administration. We need a programme to rejuvenate our ageing fleet and ensure that new ferries are built in Scotland. I ask the minister and cabinet secretary to consider the case for simpler and smaller models being built on the Clyde in order to help to fill order books.
The test for the future viability of Ferguson’s should not be at the mercy of a vessel that is as complex to build as the Glen Sannox. I encourage the Government to engage with the GMB union on the potential for new roll-on, roll-off ferries to be built on the Clyde and deployed in the CalMac fleet. I say again that if concerns about the workforce had been addressed at an earlier point in this fiasco, perhaps the delays and overspends that have dogged the project could have been avoided. That underlines the need for the workforce and islanders to be adequately represented in the governance of the ferries network. There should be an urgent review into the suitability of the CMAL-CalMac model. It was designed in another time for another time.
I want to acknowledge that although today’s Audit Scotland report usefully sets out the scale and nature of the failings at Ferguson’s, it does not answer all our questions. It does not look into tender documents or in any depth at the reported changes in procurement and design once construction had been approved. It has not been able to interrogate in much greater depth the breakdown in the relationship between CMAL and Ferguson’s. It has not been able to establish whether it was reasonable to pay a turnaround director £2,783 per day, and it could have interrogated what ministers knew and when, and why on earth they did not put in place normal financial safeguards.
There is another way to get those answers and to ensure that lessons are learned from the fiasco—a full public inquiry. There was a public inquiry for the Edinburgh trams because the costs doubled. Costs in this case have more than doubled. There would be no hiding from scrutiny in a full public inquiry. Key witnesses such as Derek Mackay and the First Minister herself did not appear before the Rural Economy and Connectivity Committee inquiry, so Scottish Labour supports calls for an inquiry.
Labour supported the decision to save the Ferguson’s yard from closure. We applaud the extraordinary effort that has gone into keeping Ferguson’s open and keeping the workers in jobs, but in failing to oversee the project adequately, the Government is failing those workers. There must be a better future for the workforce at Ferguson’s, for the lower Clyde and for our island communities. To unlock that future, we call on the First Minister to step in and turn the yard around.
I move amendment S6M-03712.1, to insert at end,
“; considers that a Scottish Government apology should be issued to island communities and the Ferguson Marine workforce, who have been affected by failures in the procurement and delivery of vessels 801 and 802; calls on the First Minister to lead government efforts to secure the completion of vessels 801 and 802 by taking ministerial responsibility for government investments in Ferguson Marine; believes that a national ferry building and procurement programme, developed in consultation with trade unions, should create new opportunities for Ferguson Marine to secure ferry contracts, and calls on the Scottish Government to protect jobs and promote sustainable growth and fair work in Scotland’s marine economy.”
The ferries fiasco is a national embarrassment of the SNP’s making. The ferries are four years late and after today will be five years late, at two and a half times the original budget. Windows were painted on just for the First Minister, cables were too short and a bulbous bow was too small. There has been endless squabbling, and now there is a damning Audit Scotland report.
The embarrassment is never ending, but it is not just an embarrassment. The situation has a real-world effect on islanders, taxpayers and the workers at the shipyard. The effect on islanders is significant; breakdowns and cancellations are commonplace. That is not a surprise, though, given the ageing ferry fleet, much of which was built on the lower Clyde in the days of Margaret Thatcher. Who would have thought that Margaret Thatcher would have a better shipbuilding record than the SNP? Yet she did.
The delays today could have been avoided if the SNP had had a proper ferry-building plan to replace the ageing fleet, but it did not. The delays almost every day could have been avoided if the SNP had built the ferries when it promised to—five years ago—but it did not. The repeated delays could have been avoided if the SNP had managed to get the ferries built in 2018, 2019, 2020 or even 2021. All of those were dates for completion promised by the SNP, but it failed over and over again.
Even now, the date has been delayed until next year. “Not more delays, cancellations and breakdowns through another cold Scottish winter,” I hear the islanders cry. One said:
“The fiasco with procurement and the ageing fleet is going to get worse rather than better in the next number of years. It’s horrendous.”
The people who are waiting for the new ferry for Arran will just need to wait longer. Those who are waiting for the new ferry to Skye will need to wait even longer. “The Skye Boat Song” would never have been quite the same without the boat.
The delays are long and tortuous, and the costs have shot through the roof. Patients, children and the homeless will just have to watch as the Scottish Government spends ever greater sums of money on two ferries that are still not complete. The costs have rocketed from £97 million to £240 million, and possibly to an estimated £400 million—four times the original price.
Let us put that in context. It would pay for seven high schools for children who are desperately waiting to move from their damp-ridden buildings. It would buy 2,000 council houses for those who are desperate for a home. It buys just one new children’s hospital in Edinburgh—but that is another story. The SNP seems to think that it is okay for all those people to wait and watch it bungle contracts for building ships on the Clyde. The issue has got so embarrassing for the SNP that it even refused to be interviewed by the BBC about the matter.
However, that is nothing compared with the embarrassment that it feels now that the SNP-owned ferry company is not even bidding to build its own ferries. Those ferries will be built by Turkish yards and benefiting Turkish workers, Turkish taxpayers and Turkish communities. I have heard some say that the new slogan should be “SNP: Stronger for Turkey”.
Because the situation has got so desperate and embarrassing, the SNP is reaching for Boris Johnson’s playbook on building bridges: it now wants to build one to Mull. If the minister is listening, I say to her that she should get on with building the fixed links in Shetland, which wants them, instead of Mull, which does not.
All of this is a prime example of a failed SNP industrial intervention strategy. It intervened with Burntisland Fabrications before the company collapsed. It is exposed to the tune of hundreds of millions of pounds at the Lochaber smelter and the 2,000 jobs are nowhere to be seen. It has spent millions on Prestwick airport, but still cannot sell it. It is potentially exposed to millions of pounds for the environmental clean-up at the Lanarkshire steel mills. It also seems incapable of handling relationships with business. It was duped by the £10 billion Chinese deal that never was. It tried to renege on a deal with Tata Steel over clean-up costs. Now it is not even able to train enough workers to build just eight wind turbine jackets in Fife.
The SNP’s record on ferry building is just one example of a series of industrial-sized failures. It is the workers, the taxpayers and the islanders who will lose out. We need a new plan for ferry construction, new investment to replace the ageing fleet, a turnaround plan that works for Ferguson’s, a Government that delivers on its promises and a public inquiry into this utter shambles, but I suspect that, like everybody else, we will be kept waiting ever longer before we get any of those things.
Yet again, we are discussing the inability of this incompetent Scottish Government to keep our islands connected. Four years ago, we needed to build one ferry every year to keep our fleet fit for purpose. Now, according to CalMac, because of the Government’s failings, we need to build two and a half ferries every year for the next 10 years to get back on track. That is a sad indictment.
Seven years ago, a contract was awarded to build two ferries; today, it appears that neither of them is close to completion. It took seven years to build an aircraft carrier and yet this Government has nothing to show for the hundreds of millions of pounds that we have spent—what a farce.
What went wrong? Things started to go wrong even before the contract was awarded. If we cast our minds back to 2014, the year of the divisive but definitive referendum, in August of that year, the Ferguson’s yard went into receivership, which was not good news for Scotland or the case for independence. Resolving the issue became a priority for the Government and for Alex Salmond. How fortuitous it was that, within a month—and before the referendum—a key SNP financial supporter and its economic adviser stepped up and purchased the yard. That was a coincidence, surely, and was not, as some have suggested, on the back of a promise that the yard would be awarded Government ferry contracts—perish that thought.
However, barely a year later, Ferguson Marine Engineering Ltd—the new name of the yard—had indeed been awarded the contract. Let me list some of the attributes of the yard that were identified at the time of its tender. It had a highly skilled workforce, no doubt, but they had no management experience of shipbuilding, and none of the managers had been near a boat. It was the most expensive tender and had the most unrealistic delivery time. The company could not provide any evidence of financial security, and did not even have the support of the purchaser, CMAL. Bearing that in mind, why would it not be given the contract?
Next, we need to look at how the Scottish Government managed the contract. As Willie Rennie said, numerous SNP ministers played pass the parcel with this hot potato and they all had their fingers burned. There was Nicola Sturgeon, who had a hotline to Monaco and the owner and launched hull 801 in 2017 with wooden windows and funnels connected to engines that were not actually there. There was Humza Yousaf, the transport minister who could not even explain why there was a delay to the ferries when we passed the construction date. There was Derek Mackay, who signed off the payment of £127 million for a £97 million contract to Ferguson Marine, only to end up with two rusting hulls.
There was Michael Matheson, as cabinet secretary for transport, who assured everyone almost up until he left the appointment that everything was going right and that nothing was wrong. There was Kate Forbes—I am glad that she is back in the chamber—who oversaw the yard palming off control to a turnaround director, who achieved no turnaround of the yard’s fortunes. There was Fiona Hyslop, who claimed that the shipyard had a bright future ahead of it but had no knowledge of the depth of the problem, and there was Graeme Dey, who knew of the problems and who was content for a shipyard in Turkey to build the next hull.
Now it falls to Jenny Gilruth, who, after five weeks of being asked when the ferries would be delivered, was unable to confirm the date, leaving it to Kate Forbes to do so today. That is a pretty disappointing roll of honour; frankly, it is a roll of shame and each and every one of them should hang their heads in shame and embarrassment.
Who was that turnaround director who was appointed by the finance secretary? He was appointed after a single telephone interview and he of course came with the relevant shipbuilding experience, having been a cruise ship engineer 30 years ago. The previous company that he turned around went into liquidation shortly after he left it.
Business experience tells me that, for the first six months of a turnaround director’s appointment, they are part of the problem; after that, they become the problem. For nearly two years, the yard struggled on, rearranging the stores and rearranging the yard layout. Some people have said to me that it was about as useful as reorganising the chairs on the Titanic after it had hit the iceberg.
Finally, I want to mention costs. Apparently, this was a fixed-price contract, with 15 staged payments for each ferry. Someone therefore needs to explain to me and to the islanders how the Government allowed the payment of 82 per cent of the contract value before the ferries were even completed. That was how much the Government had paid when the yard went into receivership, but it does not stop there. Without CMAL’s knowledge, the Government lent FMEL £45 million—the Government did not tell CMAL that it had lent that money, when CMAL was still signing off payments before they went to the Government.
Today and at every opportunity, the Government has swept under the carpet the costs of the additional harbour infrastructure that is necessary to allow the new ferries to run. We have not even considered how much has been spent in each harbour to allow the ferries to come in, or the cost of the liquefied natural gas tanks. That is interesting, because we commissioned the ferries even though we do not have any LNG, so it will have to be delivered to the ferries in lorries that travel from Kent to allow them to run. I am sure that those are really good green policies.
When it comes down to it, we have heard today—unless I have got it wrong—that there is about another £140 million to be spent on the ferries, and we have already spent £140 million. My belief is that we will probably have spent £100 million on infrastructure by the time that we have completed it all. I think that we will have little change from £0.5 billion. If we open the books, we will find out the true costs at all stages.
I know that the Auditor General has been quoted, but I will quote him again. He said:
“The failure to deliver these two ferries, on time and on budget, exposes a multitude of failings. A lack of transparent decision-making, a lack of project oversight and no clear understanding of what significant sums of public money have achieved. And, crucially, communities still don’t have the lifeline ferries they were promised years ago.”
The situation is a complete mess and a complete demonstration of catastrophic mismanagement, as the REC Committee pointed out in 2021. What we really need is a public inquiry.
I welcome the opportunity to speak in this debate on Scotland’s ferries. Although I was not an MSP at the time, I am acutely aware of the extensive inquiry that the Rural Economy and Connectivity Committee undertook on ferries in session 5. I am sure that we are all in agreement that it is incredibly crucial to our island communities and island economies that we have good transport links between our remote communities and the mainland. Those transport links act as an essential lifeline for residents, including for the supply of food and services.
Over the past few years, Scotland’s ferries have been operating in very tough conditions. Ferries have faced the challenges of the Covid-19 restrictions, combined with increasingly adverse weather events. Vessels also need to be taken out of circulation for essential day-to-day maintenance, which folk in the chamber seem to forget about at times. Those challenges have caused cancellations and disruptions on the ferry network.
In response to those challenges, the SNP Scottish Government has invested more than £1.9 billion in our ferry services, vessels and infrastructure since taking office in 2007. Those investments have included money for new routes, new vessels and upgraded harbour infrastructure, as well as the roll-out of significantly reduced fares through the road equivalent tariff scheme.
The member mentioned the level of investment that the Government has made in ferries since 2007, but the Government has built only six ferries in 15 years. That is not nearly good enough, particularly when that is compared with the record of the last Labour-Liberal Democrat Administration, which built 10 ferries in eight years. Clearly, the rhetoric is not matching the reality of what people in Scotland need.
I hear what Mr Bibby is saying, but we have put the budget in place, and sometimes what is in place is more important than what is delivered—that does not really make much sense, Presiding Officer. What I was meaning was that, sometimes, it is good to have the budget in place and the responsibility within the Scottish Government.
As Mr Bibby said, since 2007, eight new vessels have been introduced to the CalMac fleet, including a further two that are under construction. That highlights the SNP Scottish Government’s commitment to crucial infrastructure for our island communities.
Our Scottish Government has delivered significant ferry fare reductions on the Clyde and Hebrides routes, which has led to a welcome boost in carryings, which supports our island and remote communities and their local economies. That was emphasised by the Scottish Government budget, which continues to provide support for subsidised ferry services across the islands, with £19.2 million for local authority ferries—an increase of £7.7 million on the previous year. That demonstrates the commitment that the Scottish Government has made to our islands.
Is the member aware that, in the 14 years up to 2007, 26 ferries were brought into service? Does she accept that the 14 years since 2007 compare poorly with that, and that the long-term failure to invest since 2007 is the real reason why we are having this debate today?
I am aware of the 46 per cent capital cut that Labour and the Liberal Democrats made in the time that they were in Government.
Given the investments and actions that I have laid out, it is simply puzzling that we continually hear from across the chamber calls for more funding for everything, including transport infrastructure, healthcare, justice and education. The list never ends, but I am still waiting to see what any of the Opposition parties’ budgets would have been. I have seen neither sight nor sound of where they would cut funding in order to fund their endless calls for money. It is very easy to make those demands when they do not have to balance the books every year. If the Opposition parties joined our calls for full fiscal autonomy for this Parliament, they would at least have a basis for their uncosted financial demands. Coming from a local authority setting, where most Opposition parties provide an alternative budget, I was amazed that none came forward in this chamber.
The Scottish Government is committed to undertaking the first comprehensive review of the ferry network. The islands connectivity plan will replace the current ferries plan and look at aviation, ferries and fixed links, to ensure that all potential options for connecting our island communities are considered. As part of that plan, it is key that the Scottish Government consults the users of the ferries and learns from the experiences of other countries and other modes of transport, and I ask the minister for an assurance on that.
I welcome the fact that the Scottish Government will produce and maintain a long-term plan and investment programme for new ferries and development of ports, in order to improve resilience, reliability, capacity and accessibility, increase standardisation and reduce emissions to meet the needs of island communities.
In 2005, when the Ferguson’s yard faced closure because of the inaction of the previous Labour Government, the SNP joined Labour rebels to demand that the yard be saved. In 2014, when the yard faced closure once more, the SNP Scottish Government stepped up and helped to save it, rescuing more than 300 jobs. Today, there are almost 500 permanent and temporary staff at Ferguson’s. Let us contrast that against the recent developments with P&O Ferries, a multimillion-pound corporation that benefited from taxpayer Covid-19 funding and has just made 800 staff redundant with absolutely no notice.
The services that are provided by P&O, including the vital links between Scotland, Northern Ireland and Europe through the port of Cairnryan, are essential for Scotland’s economy. The Tory UK Government has consistently blocked changes to employment legislation that would have prevented the abhorrent treatment of workers at P&O Ferries, and it still shows no signs of doing anything to close down the possibilities of future companies doing the same.
Will Labour join me today in supporting the Scottish Government, which shows clear support for P&O Ferries employees and calls for those fire-and-rehire practices to be outlawed?
I am really pleased to take part in today’s debate, and I thank Finlay in my office for stepping up this week in the most difficult of circumstances.
I have been raising the issue of ferries pretty much since I stood for election, in my capacity as a regional MSP, when I held the transport brief and when I was a member of the then Rural Economy and Connectivity Committee. The debate is really for our islanders. It is a chance to give them a much-needed voice in all this, because barely a week goes by without a ferry-related fiasco on our beleaguered ferry network.
MSPs who represent any island community will know at first hand about the constant delays and cancellations that have become a regular and routine part of islanders’ day-to-day lives. Those issues are not all weather related, either. I see those who sit behind the Government benches, sheepishly asking their scripted questions about ferries and pointing the finger at everyone but their own ministers. All the while, they pretend to be angry in the local papers, but they are afraid to come into the chamber and hold their own ministers to account for a change.
I absolutely recognise that they represent those communities, and they should be ashamed of the way in which their Government is treating them.
In the past few weeks alone, there have been perfect examples of what the issues mean on the ground for islanders. The 16-year-old MV Loch Shira has been out of action due to numerous sewage system problems. Multiple routes are out of operation because the temporary replacement vessels are unable to handle the strong winds that the scheduled vessel could have handled. It is the constant moving of the pieces of the jigsaw—moving vessels from one route to another and pitting island against island—that is annoying islanders the most.
The biggest kick in the teeth is handing ferry contracts to Turkey. That is the inevitable and sad outcome of the nationalisation of a Clyde shipbuilder. I say to Willie Rennie that “stronger for Turkey” is not just a silly meme; it is, unfortunately, a sad and inevitable truth as a result of this Government.
I know what Mr McMillan is going to ask me, and I will come on to the nationalisation issue in one second, so listen up.
The story of this Government’s mismanagement goes back—[Interruption.] Please listen, because I am very happy to address the utterly catastrophic nationalisation project that you have embarked on in one second.
I am happy to do so, Presiding Officer.
The 2007 SNP manifesto promised
“a fairer deal for ... Islands”.
That was an admirable promise to make to the electorate. In 2011, the SNP repeated that promise by saying that it had
“placed the needs and aspirations of ... our island communities at the very centre of the Government’s ... agenda.”
Is that so? Where on earth is this new ferry for Arran, in that case? Which bit of that single failure alone is putting our islands at the heart of the Government’s agenda? Back in 2015, the First Minister herself said that the Scottish Government was
“committed to supporting ferry users around Scotland by providing safe and reliable services.”
She went on to say that the Government would ensure that
“we have a fleet that continues to deliver for the communities that depend on it.”
First Minister, we are still waiting for that fleet.
Two years later, the First Minister made another visit to Ferguson’s. That famously went down in history as the much-heralded launch of the Glen Sannox, a ship with no pipework, no electrics, no engine and those infamous painted-on windows, which have come to symbolise the Government’s approach to our island communities. It is all shiny and appealing on the outside, but it is not fit for purpose when we peer through the painted-on portholes.
All we have heard are countless manifesto promises and countless programmes for government, but not a single head has rolled, no one has been fined, no one has been investigated and no one has really been held to account.
Of course, I welcome today’s apology from the Minister for Transport, but all the while, our islands are suffering on a day-to-day basis. I have raised ferry-related problems no fewer than 85 times in the chamber, including in my maiden speech. One of the first anecdotes that I shared in the chamber was about a gentleman from Arran with a physical disability who could not schedule a hospital appointment on the mainland. That was six years ago. Since then, dozens and dozens of cases have been taken on by my office, by the offices of my colleagues and probably by every member in the chamber. Problems have related to accessing healthcare, education, tourism, businesses and agriculture.
I could spend a whole afternoon sharing stories and anecdotes of people being let down by a litany of ferry delays and cancellations due to technical issues. Graham Simpson spoke about a constituent of mine who missed a breast cancer operation not that long ago. That is not just a shame; it is negligence. That was not the fault of Covid, Jim McColl, Tim Hair or even Robbie Drummond; it was the fault of the whole broken system.
That system involves ferry tenders that are so narrowly specced that they prohibit sensible competition on profitable routes; a ferry operating company that does not own the ferries that it operates and is not given the ferries that it asks for; vessels that do not match the ports that they are supposed to serve; putting cruise-liner services on short-range commuter routes; failing to listen to the needs of communities; complex ownership and operating structures; a lack of oversight; and zero accountability when it comes to millions of pounds of public money. We can sprinkle on top of that a gross and long-standing failure to come up with any shipbuilding or procurement plan that is fit for purpose and delivers value for money.
If we scratch below the surface, we find that everyone knows that CalMac is at creaking point. It knows it, CMAL knows it, Transport Scotland knows it and even the Government knows it.
Let me turn to the point about nationalisation. We hear it so many times that the Government saved the yard. If it saved the yard, let me ask some very specific questions. Did Jim McColl ask or offer to siphon off the CMAL contract into a separate company of which the Government could easily have taken ownership, which would have allowed the yard to prosper, free from the shackles of the plagued LNG project? Was he lying? Was his offer rejected? If so, why? Who else put in a bid for the yard? How many bids were received, and why were they rejected?
Did the Government threaten potential new owners of the yard with the burden of calling in its debt? Who on earth did the risk analysis on the effect that public ownership would have on the yard, on state aid and on the ability to tender for new contracts? Where are those new contracts? Which bit of saving the yard has resulted in Scotland building ships in Turkey?
At least Scotland’s other Government gets on with actually building ships in Scotland. The Scottish Government should be ashamed. I support the motion in Graham Simpson’s name.
I welcome the debate and the tone of the minister’s opening remarks, as she seemed to accept that islanders have been let down.
Islanders on Arran and Cumbrae contact me almost daily about ferry cancellations. They fully appreciate the problems that are caused by weather and by Covid, which is still with us, but they get in touch about issues connected to mechanical and technical failures, which impact on their lives and the lives of everyone in their community. This debate is about the failure to deliver a resilient ferry fleet.
In the time available, I will focus on the long-term failure to invest in new fleet on CalMac routes, the lack of an industrial strategy or procurement framework to ensure that we have the capacity to build new fleet in Scotland, and the wider issues relating to employment rights in the maritime sector, which Jackie Dunbar referred to and which have been highlighted again through the treatment of P&O workers.
Most industry experts agree that the average life expectancy of a ferry is 25 years. Half of the 31 state-owned ferries in Scotland are older than that. The MV Caledonian Isles, on the Ardrossan to Brodick route, was brought into service in 1993; the MV Loch Riddon, on the Largs to Cumbrae route, was brought into service in 1986; and the MV Isle of Arran, which is used on the Ardrossan to Campbeltown and the Ardrossan to Arran routes, was brought into service in 1983. Over the past five years, more than 1,000 ferry sailings have been delayed due to mechanical issues associated with the age of the fleet.
The consistent failure to provide investment since 2007 is one reason why we are in the position that we are in. Earlier, we heard the statement about Ferguson Marine. It is important that we put on record that it is not the workforce’s fault that we are in this position; we are in this position because of mistakes and mismanagement by politicians and management. We need to rebuild the reputation of the yard and ensure that a pipeline of future ferry contracts can be achieved, and we need to learn from the mistakes that have been made up until now.
The Scottish Government has wasted more than half a million pounds in taxpayers’ money for private firm Ernst & Young to provide advice since 2015. We have already heard that senior management have been paid eye-watering sums. We need an emergency ferries plan with a procurement strategy to ensure that our ferries are built in Scotland and that groups such as the Arran Ferry Action Group and islanders in the affected communities are involved in decision making. Frankly, if they had been more involved in the decision making that led to our having this debate, we would not be hearing these kinds of contributions from members on all sides of the chamber.
The trade unions also need to be involved in those discussions—I asked the cabinet secretary yesterday if they could be involved in discussions about P&O ferries. It is vital that the workforce in CalMac, CMAL and Ferguson Marine be involved in those discussions, too.
The Scottish Government needs to accept that mistakes have been made; it needs to stop digging and to accept that, since 2007, investment has not been made at the level that has been required, and therefore that further investment is needed to catch up. We need to start including communities in decision making, which includes having the Scottish Government agree to a public inquiry to ensure that lessons are learnt for the future.
The backdrop is the marine sector, which employment law does not fully cover. Due to the exemption of seafarers from all employment law regulations, workforces that are brought in are paid less than the national minimum wage. That is part of the reason why it is important that ferries are kept in the public sector and that Ferguson Marine, CalMac and other parts of the sector that are owned by the public are successful.
I assure the Scottish Government that it has the support of Scottish Labour in keeping these services in public ownership. However, we genuinely believe that the Government needs to listen to what communities, the workforce and all involved are saying, to learn lessons and to agree to a public inquiry, so that we do not repeat the mistakes that were made in the past.
I am grateful for the opportunity to speak in the debate. We can all agree that ferry services provide an essential lifeline to island and remote rural communities and their economies, as we have heard. I am aware of how important those services are to the communities that they serve and of what they mean to the economy and general wellbeing of such communities.
The changing climate and the many storms that we have had this year, alongside Covid-19, have caused many cancellations in ferry services, and I appreciate the apologies from the Minister for Transport.
Before we go further in our discussions, I want to touch on the Audit Scotland report. Like any report, it looks back but also makes recommendations on ways ahead. I want to touch on a point that both the Cabinet Secretary for Finance and the Economy and the Minister for Transport have made. The report says that Audit Scotland’s
“recommendations are intended to support the completion of vessels 801 and 802”
—that has been picked up;
“improve future procurement, contract management and delivery of new vessels”
—that has been picked up;
“help inform thinking about the future of FMPG”
—that has been picked up; and
“increase the transparency of the Scottish Government’s decisions and expected outcomes in relation to supporting private business.”
Today’s debate is about looking back but also about learning lessons.
We have to acknowledge that technical issues have caused further problems, adding to people’s frustrations and inconvenience.
It is also worth acknowledging, as a balance, that more than £2 billion has been invested in service contracts, new vessels, and infrastructure since 2007 and that, in the current five-year period, a further £580 million has been committed. Jackie Dunbar made the good point that we had no alternative funding proposals from Opposition parties—none.
The £580 million will enable harbour investments, two new vessels for Islay to be built and the purchase of the MV Loch Frisa, as we heard earlier.
That is a decision for the people who have the expertise in that sector. I do not pretend to have that expertise, but I am more than happy to take the question up.
The Scottish Government’s commitment to publish the islands connectivity plan by the end of 2022 is also welcome and I have no doubt that it will be discussed in the chamber and in committee, as it needs to be. As we know, the islands connectivity plan will replace the current ferries plan, and it will look at aviation, ferries, fixed links, and investment in more sustainable ferries, and it will ensure that 30 per cent of state-owned ferries are low emission by 2032.
The islands connectivity plan will be implemented through the national transport strategy and the strategic transport projects review. That will enable us to consider other potential viable options for connecting the islands.
The islands connectivity plan will replace the ferries plan by the end of 2022, and engagement and consultation on it will enable substantial public and community input. We heard that important point from Katy Clark; there needs to be input from the communities, which must be extensive and allow for two-way conversations. Perhaps the minister or cabinet secretary can comment on that in summing up this afternoon. It is incredibly important.
We need to invest in more sustainable ferries and reduce their carbon footprint. We are committed to 30 per cent of state-owned ferries being low emission by 2032.
The Scottish Government plans to explore the potential to build more fixed links to island and remote communities, such as a bridge from Gourock to Dunoon, and work with island communities to reduce their reliance on ferries. Again, that needs to be part of the consultation process
Investment in our ferry fleet can come with benefits for our industry. The Scottish Government’s intervention in 2019 saved the Ferguson’s yard and its workforce from an uncertain future, and we cannot underestimate that. Progress has been made at the yard, but we need to ensure that Ferguson Marine is back to being a serious contender for future vessel contracts.
I am sorry, Mr Sweeney. I have taken a few interventions already.
However, we must ensure delivery as best we can when it comes to lifeline services for our island communities. Ferguson Marine continues to evolve, and the appointment of the new chief executive officer earlier this year has been touched on. The Scottish Government remains fully committed to supporting the Ferguson’s yard to secure a sustainable future, including a pipeline of future work.
Of course, it was disappointing that Ferguson Marine did not progress to the invitation-to-tender stage of the Islay vessel last year. The Scottish Government continues to work closely with the yard to ensure that it becomes globally competitive, and we should remember that Ferguson’s yard is still operating and employing hundreds of skilled workers.
The decision taken to safeguard the future of Ferguson Marine was the right one. Not only did our efforts save the last commercial shipyard on the Clyde from closure; they directly saved more than 300 jobs.
I do not have time, as the Presiding Officer has said.
The Scottish Government has set out two priorities for the yard’s management: to finish building the two ferries that are under construction; and to get the yard back into shape to compete for new work. Scottish Government ministers will do all that they can to ensure a strong future for Ferguson’s.
A review of whether the legal structures and governance arrangements that exist between the tripartite group of Transport Scotland, CMAL and CalMac remain fit to deliver an effective, efficient, and economic ferry service has just started and will deliver a final report later in the year.
The Scottish Government is also developing a revised ferries stakeholder engagement strategy. I hope that the cabinet secretary or minister can talk about that in summing up. The strategy will set out an approach to engagement on the three key areas of operational issues, strategy and policy.
The infrastructure investment plan for Scotland for 2021-22 to 2025-26 will produce and maintain a long-term investment programme for new ferries and development at ports to improve resilience, reliability, capacity, and accessibility, and reduce emissions to meet the needs of island communities.
It has been a tough few years for some of our island communities because of adverse weather, Covid, and of course technical issues and delayed orders. Lessons need to be learned. Our island communities need to be reassured and fully consulted, and we need a thriving shipbuilding industry in Scotland.
As we have heard from members across the chamber, ferries are vital arteries for our island communities. A cancelled ferry is a first baby scan missed, or a shop or pharmacy unstocked. The accumulation of such disruptions reach a tipping point at which island life is sadly no longer viable.
There is no doubt that this has been a challenging winter for island residents, businesses and communities. As a Highlands and Islands MSP, I feel viscerally the impact that ferry disruption has on my constituents. It is vital to put them at the centre of the debate.
Earlier this month, three families with young children left South Uist in just one week, after the latest in a long string of incidents that had led to cancellations of the Lochboisdale ferry. Only 24 per cent of respondents to the national islands plan survey feel that young people are sufficiently supported and encouraged to remain on or move or return to islands. We can change that by improving transport links and connectivity.
Lifeline ferry services are essential to community life, so it is only responsible that their governance should include members of the communities that they serve. A positive step would be for the Scottish Government to implement mandatory islander representatives on the boards that provide oversight of Scotland’s ferries.
It should not be lost in this debate that the ferries are not separate from our communities; they are our communities. Water-based passenger transport provides around 1,100 jobs, mainly in island and coastal areas. I join the Scottish Government in recognising the work that vessel masters do in ensuring the safety of crews and passengers.
The Scottish Green Party strongly supports ferry workers’ rights and joins the Scottish Government in condemning the despicable employment practices that were recently deployed by P&O Ferries. It is imperative that the UK Government take swift action to close the legal loopholes that made that possible.
Covid-19 could not have been predicted, but the resulting absences and disruption should now be factored into business planning. That may require extra resources, and we would support the Scottish Government to take action to increase resilience in staffing.
Similarly, the climate emergency has meant that extreme weather events are becoming the new normal. The recent spate of severe storms has shown just how disruptive that can be to transport, as well as to internet and electricity connections. We need to take action now to make plans to adapt to those changes so that islanders are not left on the sharp end of them.
How can we move forward? I echo the calls from my constituents and local councillors for the current fleet to be expanded, which would build in redundancy over the winter and add capacity in the summer. I welcome the minister’s comment that such work is under way.
Rapid change needs to be made, but we must get it right, which means taking the time to properly define the requirements and identify the benefits, as well as increasing investment.
Although I welcome the investment that has been made in service contracts, new vessels and infrastructure, and the further £580 million that has been committed over the next five years, I urge that new vessels be zero or low carbon. Electric ferries are already running on renewable energy in Sweden and Denmark, and Europe’s first green hydrogen ferry is currently being designed here in Scotland. We may also need to increase the use of diesel-electric hybrid ferries until we can phase out diesel completely.
Given that the number of low-emission ferries has gone backwards in the past few years, because of the purchase of the northern islands boats and the fact that there are so many issues with regard to the replacement ferries, does Ariane Burgess support our call for a public inquiry into the Government’s mismanagement of our ferry network?
I find it disappointing that the member wants to turn the debate into a point-scoring blame game. Our communities need us to work constructively to provide the best lifeline services we can. That is the Greens’ approach.
Retrofitting an electric motor to a diesel ferry is a win-win, as it cuts pollution, emissions, noise and running costs. On a recent trip to Orkney, I was pleased to see the work that NorthLink Ferries and Orkney Islands Council have undertaken to reduce emissions through the use of onshore electricity connectors. Installing electric vehicle charge points on ferries would enable drivers to charge their vehicles en route, reduce range anxiety and increase the use of electric vehicles on the islands by residents and tourists. Sweden’s Ropax ferries already have EV charge points. Such charge points can be retrofitted on our current vessels.
In order to upgrade and decarbonise the fleet, we need a strategic long-term plan, but that is challenging when the publicly owned operator, CalMac, has to bid for the contract every six years, at great expense. It would help if we were to end the competitive bidding process and make interisland ferries part of a publicly owned Scottish national infrastructure.
Fixed links are another important element of our transport mix and could provide cost-effective long-term solutions for island communities such as Yell and Unst in Shetland, where there is strong support for such links.
I stand firmly with our island communities, ready to listen and to incorporate their lived experience into our future work on the islands connectivity plan, the resource spending review and the second strategic transport projects review. I will be working hard with the Scottish Government to deliver a robust ferry network that will help to reverse depopulation and ensure a future in which our island communities can flourish and thrive.
When it comes to the procurement and construction of new lifeline ferries—the Glen Sannox and 802—it is important to deliver the vessels, and ultimately the service, that our constituents both need and deserve.
As the local member for two island communities, Arran and Cumbrae, I can say that the sheer number of ferry-related emails and phone calls that I have received in recent months and years, even at the height of the coronavirus pandemic, reflects the increasingly poor and unreliable service that islanders have had to put up with for far too long.
Roughly 40 per cent of sailings to and from Brodick this year have been cancelled, mostly—but not only—as a result of inclement weather. That is totally unacceptable, and island constituents and businesses are understandably at the end of their tether.
It is simply undeniable that island communities have been affected by the repeated delays in, and the spiralling cost of, delivering a reliable Clyde and Hebrides ferry fleet. Most island constituents appreciate that a sustained and prolonged period of severe weather, as well as Covid outbreaks among crews, have caused severe disruption to lifeline ferry services for Arran and Cumbrae, and to others across the network.
However, those constituents also know that there have been serious project management failures in relation to construction of the Glen Sannox, which was originally due to be delivered in 2018 to operate on the Ardrossan to Brodick route. That vessel is absolutely key to improving the island’s ferry services, but many islanders now wonder whether the ship will ever go into service. I was pleased, therefore, to hear reassurances, and a very determined statement, from the cabinet secretary that that will happen.
The recent announcement regarding a further delay in the delivery of that long-overdue vessel as a result of issues with legacy cables that were installed prior to the shipyard going into administration in August 2019 and damage to the hull after the Glen Sannox recently slipped its moorings, requiring a repair in December this year, adds insult to injury for Arran residents and businesses. Audit Scotland’s report provides a timeline that details a plethora of missteps that ultimately led to the failure to deliver the two vessels on time and on budget.
Of course, hindsight is always in 20:20 vision. Let us not forget that, at the time that the contract was won by Ferguson Marine Engineering Ltd in Port Glasgow, there were few—if any—objections, and much celebration that the contract could, and would, revitalise the yard.
Luke van Beek, a former independent shipbuilding adviser to the Scottish Government, said that he
“was in no doubt that”
“had the management expertise”,
“Having rebuilt the yard”,
“had a good shipbuilding system in place.”—[Official Report, Rural Economy and Connectivity Committee, 5 February 2020; c 2.]
Indeed, the pioneering diesel-electric hybrid ferries MV Lochinvar and MV Hallaig had just been delivered by the shipyard on time and on budget, to be followed soon after by the MV Catriona, which now serves Lochranza from Arran.
Does the member accept that CMAL, the company that was charged with overseeing the contract, was distinctly unhappy with the awarding of the contract? In fact, in August of the year in which the contract was awarded—a month before it was awarded—CMAL voiced its concerns as to whether the management of the company was capable of undertaking the job.
That is a fair comment. However, I have to say that the overwhelming view at the time, in the chamber and beyond, was that, on balance, the right contract had been awarded to the right yard at the right time. As I recall, as a member at that time, that was certainly the view.
Of course, we must not forget that the Scottish Government’s subsequent actions to protect the shipyard from closure protected hundreds of skilled jobs in one of Scotland’s most deprived communities—a step that was criticised by some Opposition politicians, including Jamie Greene, who were apparently happy to see Ferguson’s close. On 2 September 2019, Jamie Greene said:
“No one in their right mind thinks nationalisation is the answer to the Ferguson fiasco”.
However, Deloitte concluded, having assessed the Scottish Government’s bid and three additional bids, that the former represented
“the best return for creditors”.
It has since become clear that Ferguson’s has yet to prove itself able to deliver large vessels on time, on budget and to tender criteria. It is therefore my firm belief that the Scottish Government was right when it recently awarded the contract to build two new CalMac ferries to a Turkish shipbuilder.
That notwithstanding, FMEL has proven that it can deliver smaller vessels on time, on budget and to a high standard. I therefore believe that small vessel procurement should and will be funnelled through FMEL and that continued success in building small ships will, in turn, build confidence and expertise, enabling future bids for larger vessels.
Delivery of the Scottish Government’s small vessel replacement programme will be absolutely crucial to improving the Largs to Cumbrae service in my constituency, and I would like to renew my calls for the programme to be expedited, given the high number of breakdowns of older vessels on the route.
Earlier this month, a rope and sea kelp lodged in MV Loch Shira’s propeller blade, which meant that it had to be removed from service, with substantial repairs required in dry dock. Relief vessels were unavailable as a result of outstanding technical faults, resulting in many people being stranded in Largs and on Cumbrae for 21 hours.
Ferguson Marine might have more obvious project management shortcomings, but other decision-making actors cannot be exempted from criticism, including Transport Scotland, whose actions have at times been characterised by poor decision making, an excessive tolerance of risk and a lack of transparency and accountability.
Where does all that leave us? First, the shipyard’s new chief executive, David Tydeman, must deliver the Glen Sannox and 802 and develop the yard so that it will once again be able to compete. I welcome early reports regarding the collaborative approach that the new CEO is taking in working closely with Caledonian Maritime Assets Ltd, including through the temporary transfer of an experienced CMAL staff member to Ferguson’s management team.
Secondly, the Scottish Government must look at how ferry procurement, management and delivery can be reformed to improve transparency and accountability within the tripartite agreement between Transport Scotland, CMAL and CalMac. “Project Neptune” has explored how institutional arrangements can be improved, although, frankly, I believe that CMAL and CalMac should merge—a suggestion that I first made in 2007.
Finally, the Scottish Government, which has invested more than £2.2 billion in ferry services, vessels and infrastructure since 2007—despite Labour’s 36 per cent cut in capital allocation in the last year of the dying Brown Government, an approach that was continued by the Tories’ decade of austerity—must continue to provide vital funding for our ports and vessels to improve services.
I welcome the announcement of at least £580 million to 2026, and note Mr Simpson’s calls for £1.4 billion in the next 10 years.
It would be interesting to see some detail on where the extra money would come from, given that capital funding from the UK Government will be cut by 9.7 per cent in the next financial year alone. The silence of the Tories on that matter during budget deliberations—
I have said in this chamber before, and I have said to anybody whom I have talked to about the yard, that my loyalty is to the yard, its workforce and its future. Two weeks ago, when I was in Greenock, I was chatting to one of the gents who works at the yard about a number of things. He said to me that he is embarrassed to work at the yard. For anyone who works in a facility to say that they are embarrassed by that is, to me, abhorrent to say the least.
I welcome the report that we have in front of us today. It is independent and impartial. Nobody can say that Audit Scotland and the Auditor General are anything other than that. Sometimes, Audit Scotland reports are not comfortable reading, and this one is not, but it is independent and impartial, and I welcome it. I will reference sections of it.
In 2014, I did not expect the yard to go into liquidation. In 2019, I did not expect the Scottish Government to take on the yard because it was going to go into liquidation once again. Similarly, in 2021, I did not expect to be calling for a change of management at the yard. In 2022, I did not expect to be in the situation that we are in.
The 2014 liquidation was a huge blow to the workforce and the Port Glasgow and Inverclyde communities. I welcomed the new owner of the yard and I was thankful for its coming in. It not only saved the existing jobs but managed to build the yard workforce back up, and I will be forever grateful to it for doing that. It also installed the first apprenticeship scheme for many years and, with that, it brought in the first ever female apprentice on the tools. Just think about that—let that sink in for a moment. Once again, I will be forever grateful to the then owner for installing that apprenticeship scheme.
While those actions were under way, there clearly were issues going on behind the scenes, as is detailed in the Audit Scotland report, and there were issues with the fabrication of the vessels. Paragraphs 4 and 5, on page 10 of the report, are helpful in that regard. Audit Scotland said, in paragraph 5:
“Despite CMAL agreeing to FMEL’s requests to change the contract and the Scottish Government providing financial support, FMEL entered administration in August 2019.”
On pages 17 and 18, Audit Scotland went on to say, in paragraph 18:
“In early 2017, 18 months after CMAL had awarded the contract, FMEL complained to CMAL and to Scottish ministers about the procurement process ... There was no evidence to suggest that the tender documentation was not understood by all bidders. Pre-contract documentation, including FMEL’s bid, suggested that FMEL was aware of the risks it was accepting at the point of contract award.”
We move on to 2019, when the Scottish Government took control of the yard. Audit Scotland said, in paragraph 92, with reference to the PWC report:
“The report concluded that doing nothing would likely result in the insolvency of FMEL.”
In 2019, if the Scottish Government had not stepped in to save the yard, the yard would have gone bust and jobs would have been lost.
Mr Simpson should hold on a minute and sit down, because this relates to points that he and Mr Greene made. In 2019, the yard was shutting and the jobs were going. The ships would certainly not have been finished—[Interruption.] They will be finished.
Paragraphs 96 and 97 are crucial to an understanding of how the Scottish Government came to own the yard. Fundamentally, the yard was going to shut anyway, as is highlighted by the reference to the appointment of administrators in August 2019. The Scottish Government stepped in to fund the £6 million wages bill while the yard was in administration, which shows its commitment to keeping the yard open and supporting the workforce.
Paragraph 99 highlights that. Audit Scotland said:
“This meant that the Scottish Government made the decision to nationalise the shipyard without a full and detailed understanding of the amount of work required to complete the vessels, the likely costs, or the significant operational challenges at the shipyard.”
I do not see how that can be a surprise to anyone if we bear in mind the other aspects that are highlighted in that paragraph, in addition to the point that Audit Scotland made on page 4, in paragraph 3, where it noted:
“This internationally recognised contract places full responsibility and risk for the design and build of the vessels with the shipbuilder and does not allow the buyer to intervene in the running of the project.”
Thus, if relationships had broken down and information was not being shared, and, by law, the buyer—ultimately, the taxpayer; the Scottish Government and its agencies—was not allowed to intervene in the running of the project, I genuinely fail to see what the Scottish Government could have done to obtain more information.
CMAL has come in for a huge amount of criticism in recent years. Having read the Audit Scotland report, I sincerely hope that CMAL staff, after everything that has been thrown at them, will feel some of the weight being lifted from their shoulders. They had a part to play, but they were by no means the core of the problem of the past few years. They are skilled people, they have expertise and vast experience, and they know what they are doing. Audit Scotland highlights CMAL’s increasing role in the yard, which I think is welcome.
The workforce in the yard know what they are doing. The two shop stewards know the yard inside out and back to front. Audit Scotland talks about the additional investment that is required to make it competitive. Prior to FMEL, the yard was a shipyard only in name. It was a living, working museum. There had been no investment in the yard for decades, despite ships having been launched from it.
The workforce know that the skills are there. I encourage the new chief executive to work with the shop stewards and the workforce and not sideline them, as happened in the past.
Today’s debate is long overdue, and I thank Mr Simpson for bringing it to the Parliament. Audit Scotland’s report is timely. The on-going saga at Ferguson’s can only be described as a national scandal. As with many of the Scottish Government’s ill-fated industrial interventions, there has been mishap after mishap since the Government took over the yard.
It all started in 2015, when ministers awarded the £97 million fixed-price contract for two ferries, despite the Government’s own procurement agency, Caledonian Maritime Assets Ltd, being hostile to the shipbuilder. Rather than there being a team Scotland national approach to re-establishing commercial shipbuilding on the Clyde, that attitude bred a toxic relationship and long-running feud, which ministers steadfastly refused to intervene in, despite direct pleas from the shipyard management to the First Minister to appoint independent arbiters. That culminated in the shipyard going into administration and a botched Government takeover, which has left the taxpayer with a £25 million exposure due to CMAL forfeiting an insurance bond with the HCC insurance company and then being successfully sued by the insurance company. When I raised the matter in June 2021, the Cabinet Secretary for Finance and the Economy claimed that I had rewritten history, saying that she could not comment on the on-going legal dispute. In January 2022, the court found in favour of the insurers and, in response to a written question about the same issue, the cabinet secretary, who had told me that I had rewritten history, accepted the point:
“The Scottish Ministers accept the summary judgement in the English court proceedings”.—[Written Answers, 28 February 2022; S6W-06586.]
The takeover was botched, and it was allowed by the failure to complete the Glen Sannox to cost, quality or schedule, meaning that it was launched in 2017 in a low state of outfit, with no bridge windows and a bulbous bow so defective that it has since had to be removed and replaced. Her sister ship, hull 802, which was planned to be launched in 2018, is still on the slipway—[Interruption.] I am sorry, but I cannot take an intervention.
There is no sign of a firm launch date in sight. Audit Scotland now estimates that the two ferries will cost £240 million, which is two and a half times the original price, and the company ran a £100 million loss in its first year of state ownership.
To add insult to that grievous injury, we now have the embarrassing situation of the contract for the two newest ferries for Scotland’s publicly owned ferry operator being awarded to a shipyard in Turkey instead of at Scotland’s publicly owned shipyard, which did not even make the final shortlist. All the while, Tim Hair, who held the job of turnaround director at Ferguson’s without a hint of irony, was pocketing £2,500 a day—more than the managing director of BAE Systems, the UK’s most successful and largest shipbuilding company.
There have been numerous changes of structure, ownership and leadership at Ferguson’s, but one thing that has remained consistent throughout is the presence of the First Minister. Her fingerprints are all over the botched takeover, all over the disputes between FMEL and CMAL and all over the ever-increasing costs to the taxpayer. It is about time that we heard some contrition on the part of the Government and an admission from the First Minister herself that she takes some personal responsibility for the mismanagement instead of claiming that her Government was somehow a white knight in what has become the single biggest public procurement disaster in Scottish history.
We all know about the failings at Ferguson’s, and those failings undoubtedly have consequences. They have consequences for island communities, which are left without lifeline ferries, for our industrial base and capabilities, and for the local communities around Inverclyde, which are left standing idly by while contracts for Scottish ferries are won by overseas competitors. It is for those reasons that we cannot simply allow Ferguson’s to continue on the path that it has been on since 2017. We need a strategy that focuses on a workforce plan, a continuous drumbeat of contracts and an ambition for shipbuilding in Scotland to be returned to its former glory as a global player.
A recent report by the Westminster all-party parliamentary group for shipbuilding and ship repair highlighted the workforce challenges facing the sector and recommended that
“a Strategic Workforce Register” should be established to collate
“a database of individuals with interest, skills and capabilities relevant to naval shipbuilding, sustainment, and supply chain industries.”
That would give a focus to a national effort to train people up and fill the gaps, managing the workforce across different shipyards on a national basis.
Public sector contracts in Scotland alone offer a massive opportunity to anchor a continuous merchant shipbuilding programme. There are 34 vessels in the CalMac fleet, with an average lifespan of around 25 years. If Scottish shipyards were to be awarded the contracts for the entire fleet—as the Ministry of Defence does for naval shipbuilders—that would mean a drumbeat of one new vessel coming out of a Scottish shipyard every nine months. At the current replacement rate, however, it would take 87 years to renew the entire CalMac fleet, which is obviously unsustainable.
If returning shipbuilding in Scotland to its former glory was a genuine ambition of the Government, we would not be in the absurd position whereby a national asset such as Inchgreen dry dock, one of the largest in Europe and less than a mile from Ferguson Marine’s cramped and antiquated shipyard, is having its potential suppressed by its owners purely to give their Merseyside shipyard subsidiary a competitive advantage. Instead, Scottish Government ministers are lauding the creation of 100 jobs in ship scrappage at Inchgreen, many of them going to agency workers and workers on temporary contracts—at that vast facility, built with public money, which could feasibly create thousands of highly skilled, well-paid, secure shipbuilding jobs for the local community and the nation.
If we are to have any intention of unlocking our potential as a nation, Inchgreen should be subject to a compulsory purchase order and heavily invested in as a national shipbuilding asset, with Scottish firms such as Ferguson Marine, Malin Marine Services and Dales Marine Services forming the basis of a national effort to restore commercial shipbuilding at scale on the Clyde in collaboration with naval shipbuilders such as BAE Systems and Babcock International.
Fundamentally, we need to end the boom-and-bust, feast-and-famine approach to shipbuilding that has plagued Scotland for the past decade. For too long, uncertainty and incompetence have dominated the shipbuilding landscape. The approach means that there is no confidence to attract the sustained capital investment that is needed to establish world-class shipyard infrastructure and for a local supply chain ecosystem to flourish. More important, it means that there is no foundation on which to recruit and train a younger skilled workforce that would be the backbone of the industry for decades to come.
Scotland has a proud shipbuilding industry, and the shipyards on the Clyde have produced world-class vessels, but the Government’s record on shipbuilding has not filled me with confidence. It should start to listen to people who know what they are talking about and who want Scottish shipbuilding to succeed.
As the MSP with probably the highest number of ferry routes in their constituency and as someone who lives on an island, I understand the shortcomings of the service only too well, and I therefore have a bigger stake in its improvements than most who are sitting in the chamber. The minister’s apology is very much appreciated.
Since May last year, there have been some quick wins. Camper vans must book, school minibuses get reduced fares and the CalMac community board has wider responsibilities. Those may seem small wins to those who do not live on an island, but they have made a difference.
As others have said, the Scottish Government has committed £580 million to fund new ferries and port investments over the next five years. On Monday, I travelled just 2 miles from the Parliament to Leith docks, where the MV Utne is currently being transformed into the MV Loch Frisa to serve the island of Mull. To respond to Mr Kerr’s intervention, the MV Coruisk’s capacity was 40 cars; the MV Utne’s capacity is 34. Passenger numbers are down, so there is a reduction, but that ferry will ply the route year round. The island made that request five years ago, and that is now coming to fruition. I think that that is a good result. It will provide a welcome addition to the route and release the MV Coruisk to other routes, as the minister has said.
In addition—this has also been talked about—there will be two new ferries for Islay. CMAL announced the preferred bidder for that contract earlier this month. The new vessels will bring an almost 40 per cent increase in vehicle and freight capacity on the Islay route and a reduction in emissions, and they will improve the resilience of the wider fleet. The first vessel is expected to be delivered in October 2024, and it will enter service following sea trials and crew familiarisation. The second vessel will follow in early 2025.
There are further projects: the small vessel replacement programme, new vessels for the Dunoon-Gourock-Kilcreggan triangle, and other services, with the Mull consultation in early stages.
It will come as no surprise that emails about ferries top my emails and that ferries are at the top of people’s agendas in my constituency visits. It is important that I have many constituents who have ideas about how the service could be improved and who welcome the forthcoming publication of “Project Neptune” and the opportunity that that will give them to feed into the process. I ask the Minister for Transport to listen to their suggestions.
On structure, there are strong views about the split roles of CMAL and CalMac. I need to be clear that those are about the structures and not the great teams of employees of both organisations, as Stuart McMillan highlighted.
Another proposal to get us through the months until the new vessels are ready is hiring a freight boat. It has been suggested that that could be used across several routes to give different islands benefit.
In the past two weeks, I have used CalMac’s services to the islands of Bute, Gigha and Mull. I am pleased to say that all the ferries ran to schedule and that I reached my destinations on time.
If I may, I would like to drop a few pebbles into the water, which I hope the minister and her team will take account of.
On Bute, some children use the ferry as though it is a school bus service. With free bus travel for under-22s, could something similar be introduced for ferries?
Pensioners have concerns about price rises across the network, which have been exacerbated by the cost of living crisis.
On both Bute and Gigha, the ferry service is not bookable. The people of both islands want to keep it that way, but they wonder whether there is a way to prioritise booking for locals who are making essential journeys, for example for hospital appointments or funerals—as has been mentioned throughout the debate—so that they can get off the island and return on the same day. When I was on Mull at the weekend, that subject was raised by constituents there, too. Over the past few months, I have also been having similar discussions with the Islay ferry group and CalMac, which led to meetings with Transport Scotland about an increase in commercial vehicles on ferries due to a projected increase in whisky production and the impact that that is having on the smaller or ad hoc freight carriers and, of course, other travellers.
That gets to the nub of the problem. With the current capacity constraints, there are different calls for space from residents who want ease of travel, commercial vehicles that serve businesses and those whose businesses depend on tourists. I am pleased that the minister has offered to look into this to see whether changes can be made. I am told that the Danish island of Samsø has an island card, which helps with a similar situation.
I also attended a joint meeting of the Coll and Tiree ferry groups, which the minister referenced. They have organised meetings with CMAL, CalMac and Transport Scotland but feel as though they are hitting a wall. Their islands have suffered over this winter, having gone for periods without a ferry. The three storms in quick succession made up the perfect storm, which was added to by the required maintenance schedule that my colleague Jackie Dunbar referred to. I quote from a recent email that I know the minister has seen:
“Our primary school on Coll has run out of heating oil and the impact on business on Tiree is now running at the rate of £1450 loss for one guest house”.
I look forward to discussing these points further with the minister.
I know that the Scottish Government recognises that ferries are an essential part of Scotland’s transport network and that the quality of our ferry services impacts on all of us. It is good news that the islands connectivity plan is being taken forward through the national transport strategy and the strategic transport projects review, which will also consider other potential options to connect our islands. Engagement and consultation on that will enable substantial public and community input. I know that my constituents are willing—and are wanting—to get involved, as this is their lifeline service.
Finally, on a positive note, if I may, Presiding Officer—
I will do. Very briefly, when I travel between my home on Islay and the Parliament, or to any of my 23 islands, I am constantly impressed by the cheerful hard work and helpful attitude of ferry crews and port staff.
I am very pleased to follow Jenni Minto, who made a very reasonable and moderate speech about the various ideas that people bring to the table. I also associate myself with her comments about ferry staff and those who work in the ferry ports.
Let me begin by mentioning an island in Jenni Minto’s constituency: the island of Mull. I take you back to Saturday, 12 March, this year—barely 11 days ago. Mull is, of course, relatively close to the mainland, but it is still reliant on ferries. It has four routes: one, Craignure to Oban, which is the main one; two, Tobermory to Kilchoan; three, the Mull to Iona ferry, which serves a resilient but small community on Iona; and finally, Fishnish to Lochaline, which is less busy because of the long road detour on the mainland but is still a crucial link.
Here is a picture of ferry services on that day. All Craignure to Oban sailings between 8.15 in the morning and 6.40 in the evening were cancelled. All Craignure to Oban sailings between 8.15 and 6.40 the day after were also cancelled. All services between Tobermory and Kilchoan were cancelled. On the Mull to Iona route, the ferry had gone out of service the day before, leaving Iona without service since 10.00 that morning. On the Fishnish to Lochaline route—the only one of Mull’s routes to the mainland that was then operating—people had to make do with a smaller replacement vessel, which was unable to carry commercial vehicles. That is one island, on one day, with one minimal, skeletal service, and all due to boats being taken out of service for repairs or for other technical reasons. It was not due to the weather, or to Covid, or to staff shortages. It is a case study of the sheer disarray that constitutes Scotland’s ferry service.
If that situation was unusual or abnormal, people might be willing to grant the Scottish Government some leeway. The shocking thing is that it is not unusual—it is what qualifies as normal service. It is, sadly, what people have come to expect; it is what people on our islands have to put up with day in, day out. That is the truly scandalous aspect of the crisis; that is what should shame a Government that has had control of the ferry network for a decade and a half.
Some MSPs here have rightly concentrated on Ferguson Marine; others have spoken about CalMac and CMAL. We have been reminded that CalMac warned the Scottish Government in 2010 that one new ferry was needed every year simply to keep up, and it was Edward Mountain who said that it is now two and a half ferries every year that are needed.
Some have spoken about systemic problems, whether that be the incompetent approach to procurement or the ageing fleet itself, with over half the boats past their use-by date. However, today, I want to talk about the human aspect of all this. Islanders of course accept that their way of life means that allowances must be made for disruption to travel on and off the islands. For those who do not need a ferry on a specific day and are able to wait, they can put up with the odd delay or cancellation. However, not everyone can wait. Some people need to travel at once and they need a robust and reliable service: the crofter who needs to get livestock to the mart; the seafood business that needs to get live shellfish to market; the patient with the hospital appointment that they simply cannot afford to miss; the services and trades that need to get to and from the islands for work; and the accommodation providers that stand to lose bookings.
Even schooling can be affected. It has been estimated that secondary school pupils from Iona who have to travel to the new high school in Oban have missed out on 30 per cent of their education due to a mixture of cancellations and the unreliability of early and late sailings from Iona. That is almost a third of their education provision and that is before taking account of the impact of the pandemic. The minister used to be a teacher—does she think that that figure is acceptable?
These are human lives and human stories; these are people who are affected every day by this crisis—people who, if things do not improve, will leave the islands. They will forsake their lives there, their jobs and their friends. We will have the depopulation that we all know is such a threat to island life. Particularly for those of working age with young families, the failing ferry service is now a driver of depopulation. Ariane Burgess was right when she talked about families from South Uist. That is not a political point; it is being said the length and breadth of our islands. The ferries community board, which is a neutral body that simply represents communities, recently expressed its concern. It said:
“While we are well used to living with the effects of weather on our ferry services and more recently Covid, the recent extent and duration of mechanical failures on multiple vessels has led to massive disruption right across the network.”
It carries on to say:
“Unfortunately, this is unlikely to be a one off with such an ageing fleet in our challenging environment. This represents a real threat to our islands’ ability to retain and attract people, ensure services are sufficiently reliable and at prices that permit viable communities and thereby avoid depopulation.”
I urge the minister to travel to the islands and speak to and listen to the islanders. Do not just consult the civil servants, Transport Scotland, CMAL, CalMac and the vast panoply of vested interests. A few years ago, the Government passed the Islands (Scotland) Act 2018—an act that requires public services to be tested in terms of their impact on island communities and an act that, at the time, was much trumpeted by the Scottish Government as ensuring island proofing. I suggest that the very first place to start when it comes to island proofing is to sort out the mess that is Scotland’s ferry services.
There is a question of responsibility; Willie Rennie was correct. We have hardly had any apologies. I note and welcome what was said at the start of the debate. However, we have had no resignations. Despite this saga lasting years and years, has anyone in a position of authority ever stepped up and accepted the blame for this? Has anyone in CalMac or CMAL or Transport Scotland ever accepted their role in this fiasco? Has anyone in the Government—any one of the many transport ministers—just once taken the blame?
People can blame the weather; they can blame the pandemic; they can blame the ferry agencies; and they can blame the operators. However, ultimately, this constitutes a failure of Government—this Government; a failure to serve those who live and work on every island in Scotland; a failure that will not be forgotten, still less forgiven; and a failure that should belatedly shame this Government into taking action.
This late in the debate, I will focus on the actions of P&O and fire-and-rehire practices, which are referenced in the SNP amendment and have been referenced by some Labour contributors.
I first pay tribute to my colleague Emma Harper, who would have been taking part in the debate, but her energies are used elsewhere as she stands shoulder to shoulder with sacked workers at Cairnryan. She has rightly said that P&O services are essential for the local economy and are critical for many businesses in Scotland, Northern Ireland and Ireland. The services support jobs not only in the port but in local businesses that support the ferry routes.
Incidentally, the local member of Parliament, Alister Jack—reputedly Scotland’s man in the Cabinet—has not had much of an impact on the subject. He does not have much of an impact, generally speaking.
Before the recent events, how many of us knew that DP World, a logistics company based in Dubai, owns P&O? The company sacked 800 workers online and frogmarched them off vessels to be replaced by cut-price agency workers, ruthlessly casting aside the workers who tried to keep the company afloat during the pandemic.
The thing is that P&O insists that it did not break the law when it fired those workers without notice or consultation. Rightly, in Scotland and at UK level, politicians have challenged the company’s claim that laws were not broken with that shock sacking. If it turns out that the company has not broken the law, that raises questions about UK employment law.
The defence may be that all vessels that were involved were registered outside the UK and that the relevant authorities in each case had been notified. However, under UK employment law, workers’ rights are based on the jurisdiction from which they work—in other words, because they work in the UK, they are covered by UK law. On that basis, as there was no consultation, the law may have been broken. However, at the end of the day, even if that is the case, that would be a pyrrhic victory for employees, as the legal dispute would be drawn out while they remain jobless yet with on-going financial commitments such as mortgages and overdrafts, and with the possibility of legal costs.
“very clear statutory obligation in the particular circumstances that applied was for each company to notify the competent authority of the state where the vessel is registered.”
He wrote that notification had been made to the relevant authorities on 17 March, and that no offence had been committed regarding notification to the secretary of state. I will come on to why that is relevant later.
There has been a lot of hand wringing by Grant Shapps and others, but they are in the very Tory Government that, just last year, blocked an attempt to pass a law that would deter employers from using fire-and-rehire tactics to bully workers into lower-paid jobs. I support Labour colleagues on that matter.
“would require businesses to meaningfully consult with their workers and worker representatives when such restructuring is required”.
In shorthand, that would mean no fire-and-rehire tactics.
I want to make my points.
During that debate, politicians from all sides of the house appeared to agree that fire and rehire tactics are morally wrong, but Conservative MPs pushed back against the need for legislation, saying that updated Advisory, Conciliation and Arbitration Service guidance to businesses should be enough to tackle the problem. Well, it is not.
The UK Government then voted down a closure motion, which would have allowed the house to vote for or against the bill, and proceeded to filibuster until it ran out of time. Finally, Conservative MP Peter Bone said:
“It seems to me that this is about something for next year. There are 17 Bills to be debated today. Why was it urgent to have this statement in private Members’ time rather than Government time?”—[Official Report, House of Commons, 22 October 2021; Vol 701, c 1065.]
I hope that he lives to rue those words.
I will conclude by reminding Tory members of the ferry contract for ferries that were not or could not be delivered. Let us not forget the actions of the gormless Grayling, previous UK transport minister, who cancelled the ferry contracts that were signed to ensure that critical imports could reach the UK in the event of a no-deal Brexit, costing taxpayers a further £50 million. Contracts worth £89 million with Brittany Ferries and DFDS to secure ferry space for vital goods across the channel were cancelled. According to National Audit Office estimates in February, the cost of compensation to ferry operators for termination would be up to £56 million. As the grand finale, Chris Grayling paid £1 million to consultants for a £14 million contract with Seaborne Freight, but the contract was scrapped after it emerged that Seaborne Freight did not build ferries, ships or boats.
My final comment about Grayling is that, in 2018, he amended UK legislation so that the secretary of state did not have to be notified of mass redundancies on ships that are registered overseas. I wonder why. It could be that, thanks to Grayling, P&O is off the legal hook. With that kind of track record, he will soon be knighted and in the House of Lords, where all the failed ministers go.
I associate myself with Neil Bibby’s comments on P&O. Our ferry workers provide lifeline services and should not be treated in the way that they have been. I pay tribute to CalMac workers, who also provide lifeline services. Neither they nor the workers in Ferguson’s are responsible for the situation that we find ourselves in.
Let us be clear that the blame for the ferry fiasco lies squarely at the door of the Scottish Government. CMAL told the Government, in no uncertain terms, that the FMEL contract that it was entering into was a huge risk, but the Government ignored the warning. Scottish ministers decided to steamroller on and, as Graham Simpson said, we still do not know why, because the decision and its reasons were not documented. That decision involved an estimated £97 million of public money, and we do not have properly documented reasoning for it. The decision has now cost two and a half times that amount and we do not even have a rowboat to show for it; only Jackie Dunbar can see that as an achievement.
The minister must tell us today why those decisions were made, because that lack of transparency is absolutely unacceptable. It is not just about an incompetent Government that squandered public money while taking selfies in front of ferries with painted-on windows; it is about the communities that the ferries serve. People cannot get to hospital or go to funerals, and businesses are failing because they cannot get their products off-island. The Government is responsible for boosting the economy, not killing it.
Ariane Burgess talked about three families leaving Uist but, because of the ferries fiasco, they will not be the only ones. Some businesses are losing thousands of pounds with each failed sailing. On a smaller scale, others are losing their weekly income at the same time as they face rising costs.
Katy Clark talked about the need for communities to be involved in planning the ferry fleet. If they had been involved, we would not be in this mess now.
CalMac has just suffered one of the worst winters in its history and has had to do so with one hand tied behind its back. Creaky vessels are having frequent technical breakdowns; vessels are not equipped for a changing climate and worsening weather; the infrastructure does not allow flexible deployment of vessels where and when they are needed; and there is not enough funding to allow ferries to operate at full capacity, even when we place aside Covid impacts on crews. I am advised that CalMac alone would require a minimum of £7 million additional funding just to employ the crew that it would need to meet demand.
The minister cannot pass the buck to CalMac, because CalMac’s action plan would include boats and crew, both of which are being withheld by the Scottish Government. The Scottish Government blames the weather, but if the wrong boats are in the wrong place, they cannot sail in bad weather.
As Neil Bibby said, our communities deserve a public inquiry into how they have been failed so catastrophically over hulls 801 and 802, and we can add to that the exposure that Paul Sweeney highlighted. It is not good enough for the Scottish Government to blame everyone else when the blame sits squarely at its door. Today’s apology is welcome but, in giving it, the minister continued to deflect blame.
Graham Simpson highlighted the fact that the average age of the fleet, which the Scottish Government aimed to take down to 12 and a half years, has soared to more than 25 years. As Katy Clark pointed out, 25 years is the accepted operational life of a ferry. She said that operational issues are due to the ageing fleet and not to CalMac. Perhaps CMAL is tendering for two new ferry engines because the ones that they will replace are obsolete and replacement parts cannot be procured.
The Scottish Government has no strategy and no plan, and it has a set of ministers who have proven themselves at best naive, but most likely incompetent or worse. Willie Rennie pointed out that that incompetence is not reserved to ferry procurement but runs though the SNP Government like letters in a stick of rock. The Government has not saved Ferguson’s; it has damaged Ferguson’s. My heart goes out to the worker whom Stuart McMillan talked about. The Scottish Government has a duty to restore the reputation of the yard and safeguard those jobs, as Paul Sweeney highlighted.
In order to have an adequate fleet that meets the bare minimum of a community’s needs, we should be launching a new vessel every two years. Today, the Cabinet Secretary for Finance and the Economy refused to guarantee that the two new ferries will come into operation, and she refused to take responsibility if they do not. We need a streamlined and effective strategy. Instead, planning and operation are split across multiple quangos and operators, such that the right hand does not know what the left hand is doing, and all that is overseen by an incompetent Government.
Our communities are beyond desperate and they deserve better. It is time for the First Minister to take control.
Thank you, Presiding Officer. I do not know whether that was a promotion or otherwise.
I echo my colleague’s apology to island communities. I, too, pay tribute to the hard work of all the staff who support our ferry networks—the people who work in all weathers and throughout the restrictions that have been imposed due to Covid-19 to ensure that our lifeline services provide a reliable and resilient service to the communities that they serve.
It goes without saying, although many have said it this afternoon, that ferries are a lifeline. For our island communities, they are the equivalent of a road in more urban areas. Our island communities rely on them for access to employment, health services and education, and to see their loved ones. We have heard anecdotes this afternoon to that effect. Ferries are also essential in supporting a vibrant and growing tourism sector and in sustaining local businesses, enabling the distribution of products and providing vital supplies to support local trade.
At several points this afternoon, I have mentioned my constituency and the islands in it, because I understand the impact directly. If emails to Jenni Minto regularly refer to ferry services, so, too, do emails to me. In fact, Donald Cameron’s example referenced several locations in my constituency.
Jenni Minto talked about the MV Loch Frisa, which would secure the return of MV Coruisk to the Mallaig to Armadale route. That is an example of an improvement to the service, which my constituents have been waiting for for a number of years. It will considerably improve resilience on the Mallaig to Armadale route this summer.
We are working on the small vessel replacement programme, new vessels for Dunoon and Kilcreggan, further major vessel replacements for Mull and South Uist, and replacement freight ships for Orkney and Shetland.
As my colleague Edward Mountain highlighted, the deal with Ferguson’s was based on a fixed price with milestone payments. That price spiralled out of control, and we have seen the delays—we heard all about them today. This week, the chief executive of CMAL advised me that, in relation to the agreement with the Turkish yard, the contract has been agreed on a fixed-price basis with agreed milestone payments. What will be different this time?
We have learned a number of well-documented lessons from the previous procurement. For example, as the member referenced, full refund guarantees are embedded in future contracts.
I return to talking about the communities. Over the next four years, we will introduce four major vessels to the Clyde and Hebrides network. The Glen Sannox and hull 802 are expected to be in service from summer 2023 and winter 2023-24. Islay vessel 1 is expected in service from summer 2024, and Islay vessel 2 from winter 2024-25. In addition, as has been referenced, the MV Loch Frisa is on course to be deployed on the Craignure to Oban route from May this year.
I would like to make some progress—I have limited time.
I pay particular tribute to four constituency MSPs: Jenni Minto, Alasdair Allan, Kenny Gibson and Stuart McMillan. They all represent constituencies that rely on ferry routes and met Jenny Gilruth, the Minister for Transport, last week. They directly represent their constituents robustly and are not slow in representing the views that constituents raise with them. They are also actively involved in looking for solutions to the problems that their constituents face.
Alasdair Allan made the point about the need for more engagement with communities. Such suggestions and solutions are being progressed. He talked about the need for more capacity in the Western Isles, particularly while the Uig to Tarbert service is out of action later this year.
Jenni Minto said that, for her, as an islander, the stakes in getting such issues resolved are particularly high. She talked about Bute children who use the ferry as a bus service and about the fact that constituents want to be truly involved in the decision-making process. Katy Clark and Rhoda Grant also made that point, which I agree with. We must also balance the needs of the different users of the vessels—islanders, businesses and visitors. We need to consider how that can be better managed.
We have spoken at length about Ferguson Marine, and I want to use some of my time to talk about that issue again. I have already set out the scale of the challenge and our commitment to make further progress. Progress has not been as fast as we would have liked, but we are making further progress.
Many people have talked about the importance of the workers in the yard, paying tribute to them. Stuart McMillan has frequently represented the workers’ views, particularly the shop stewards’ views. That has actually delivered results in relation to a closer working relationship with CMAL, which was called for, and the importance of having a pipeline of talent through the apprenticeship scheme and of ensuring that leadership is ultimately accountable. The shop stewards and workers know the yard and know their trade. I assure them that Stuart McMillan represents them and their interests vigorously in his discussions with me.
There has been talk of significant increased investment in ferries and ferry procurement. As members know, I am always open to additional budget asks. I am happy to be corrected but, in relation to the three budgets that I have introduced, I cannot think of a single time when either the Conservatives or the Labour Party have made additional ferries funding a key requirement, whereas the Liberal Democrats, to be fair, and SNP members have done so. I do not know who will take it forward, but I look forward to next year’s budget and to additional funding for our ferries being front and centre of the asks of the Labour Party and the Conservatives.
We recognise the work that needs to be done, the importance of ferries and the need to ensure that there is a robust and renowned shipbuilding industry in Scotland. The debate has flushed out those issues in more detail, and I look forward to progressing them with Jenny Gilruth.
As an islander, I think that today’s debate has been an important one. It has been illuminating, although, I suspect, not in the way that the Scottish Government would have hoped.
For far too many years, there has been a slow-blazing fire where a Scottish Government ferries strategy should be. That has had a real impact not only in my Highlands and Islands region but across other parts of Scotland.
We are all guilty of sometimes looking too much at the symptoms. We are annoyed by cancellations. We get upset about the impact on the economic recovery of our communities. As many of us have done today, we focus on those most obvious rusting reminders of ministerial failure that sit, unfinished, on the banks of the Clyde—the wooden windows and fake funnels of the Glen Sannox, as Edward Mountain highlighted. The project was launched with a fanfare that must now make even the First Minister cringe with embarrassment. As Neil Bibby said, ministers were quick to head down there when there were public relations opps, but not so much now.
Although we must take a real look at the causes and solutions, underlying it all is a Scottish Government that has taken remote and island communities for granted—a Government that has, more than any in the history of devolution, shied away from structural change in favour of showmanship, and a Government that has placed long-term problems that need big solutions in the “too difficult” pile.
Now, after almost a decade and a half in power, the consequences of that approach are showing in almost every part of our lives. There have been too many examples of those consequences from around the chamber today. I want to emphasise the impact of those consequences on the lives of the communities that ferries serve.
I mentioned recovery, which is a key area. At vital parts of this two-year pandemic, businesses and workers have sought to get things back on track and to bring in money when they could, often after long periods of being unable to operate at all. However, too often, communities have been hampered in that recovery by the problems with their ferry links.
For some parts of our economy, there have been longer-standing problems, with some of our most fragile communities left behind by choices that were made for them in Edinburgh. For some, the problems have meant poorer access to public services, as members have highlighted, with islanders having to miss rarely available appointments on the mainland because of a lack of transport options. Although isolation has been one of the worst parts of the pandemic for many people, for some who are reliant on an unreliable network, that isolation was made worse.
There has yet to be a clear, strategic look at Scotland’s ferries in the round. The Scottish Government has attempted to answer concerns in a piecemeal and short-termist way. It has often broken promises on fair funding and road equivalent tariff in the northern isles. First, we get the pledges, which then become ambitious targets and, finally, aspirational dates in the diary to be conveniently forgotten. Our islands have too often seen ministers visit and make promises. Islanders have then watched those promises sail away into the sunset, never to be met—if only the ferry network was that predictable.
It will take an entirely different approach to resolve the issue. We are calling today for an inquiry into the repeated failures to make provision for renewing our ageing fleet. Above all, we need to examine the sustainability of the fleet in delivering current levels of service. We know that it is not only the franchised ferry fleets that are in need but those that the two local authorities in Orkney and Shetland operate.
At the same time, any strategic examination of ferries must make a credible estimate of the costs and advantages of fixed links. Colleagues will know that fixed links can take a number of forms and that they could be a key part of the transport network in the northern isles, as Willie Rennie highlighted. Where real benefit can be demonstrated—I believe that, in many cases, it can be—we should get on with the job of building sooner rather than later.
We must be realistic about the needs of our fleet in order to be able to review them and set them out for the coming years and decades. That will take a level of honesty and commitment to funding and to the sort of contingencies that are essential in such operations.
As we look forward to reducing carbon emissions, where do our ferries stand? The Scottish Government can hardly claim to have any leadership role when we buy up from abroad vessels that countries dispose of as they switch to renewable alternatives. Norway aims to have an entirely electric car ferry fleet by 2025. Where will Scotland stand at that point? We know that the Scottish Government’s decision to buy the northern isles boats has put it even further away from its own targets for reduced emission vessels.
At the heart of these decisions must be the communities themselves. The future of routes, provision and resourcing should not be decided in St Andrew’s house or Transport Scotland alone. It should not be left up to ministers or officials in whom communities, understandably, have little confidence.
Those decisions should be made with by consulting and collaborating with people who depend on ferries, but that simply does not appear to be on the Government’s agenda. As the local council highlighted, the Western Isles still have no one on the board of CalMac—the very operator that provides vital lifeline services to those islands.
A number of notable contributions have been made today. My colleague Graham Simpson highlighted that NASA designed and built rockets to go to the moon’s Sea of Tranquillity quicker than the SNP has taken to build a replacement ferry to Tarbert. He also highlighted two figures that relate to how much is needed to invest in our ferry fleet. Former transport minister Graeme Dey is reported to have suggested that it would take £1.5 billion over 10 years. Our estimate is £1.4 billion.
Edward Mountain noted that Scotland now needs to build 2.5 ferries every year for 10 years just to get back on track. However, there is no inherent problem with Scottish shipbuilding or contracts from Government. In the past few years alone, yards in Scotland have delivered two aircraft carriers for the Royal Navy and are producing type 26 and type 31 frigates for the UK Government.
Speaking about the ferries at Ferguson, Jamie Greene rightly highlighted that, despite the endless failures, the delays, the cost increases and the people and communities that have been let down, no one in the SNP Government has been held to account.
My colleague Donald Cameron spoke passionately about the degradation of the service that people in the Western Isles have come to expect, its potential to further the problem of depopulation and the impact on schoolchildren on Iona of unreliable ferry links with Oban.
There has been a growing crisis in our ferry services for some time now. A programme of recovery will be one strand of sorting things out, but, as we have made clear, that will not be the only action that is needed. We need a long-term, strategic approach to ensure that services remain sustainable and operational and that they improve for the communities that we serve.
I hope that the minister and her colleagues have noted the many examples that have been outlined today, and I hope that the cabinet secretary recognises and accepts that this is not good enough now, and that it is getting worse. Our constituents are watching. They are desperate for better from this Government. I hope that every MSP across the chamber who genuinely cares about the future of communities that rely on ferries will support our motion.