Bonus shock for over-budget Ferguson ferries
Opposition parties reacted with dismay to a new report that bonuses have been paid to management behind two over-budget ferries whose final cost and completion remains “unknown”.
Audit Scotland said it is “deeply concerning” that there is still doubt over when the publicly-owned Ferguson Marine shipyard on the Clyde will finish the construction of the two ships.
Vessels 801 and 802 are already five years late and estimated costs have ballooned from an initial budget of £97m to £293m.
Scotland’s auditor general said the latest estimates suggested an extra £9.5m is required for the ferries.
Stephen Boyle said that doubt remained over the long-term viability of the Port Glasgow shipyard, which was nationalised in 2019.
Among the issues raised by the report was the £87,000 in bonus payments made to senior managers at the shipyard during 2021/2022.
Mr Boyle said it was “unacceptable” that the performance bonuses were awarded without Scottish Government approval.
He said it was not clear how the performance of the managers was assessed.
Scottish Liberal Democrat economy spokesperson Willie Rennie said: “This Audit Scotland report into Ferguson Marine is just unbelievable.
“Big bonuses for ships that still aren’t ready. No clear understanding about when these ferries will be complete and what the final bill will be.
“This is all under the direct control of the SNP Government. We were promised the nationalised service was going to be so different, we were promised that these ferries were now on track, we were promised that the financial bill would be brought under control. All of that is complete and utter nonsense.
“This is a dreadful report and we need an urgent statement from ministers to explain what on earth has gone wrong.”
David Tydeman, CEO of Ferguson Marine Port Glasgow (FMPG), said the board of directors accepted the feedback from the auditor general.
He said: “We have taken on board the remarks from the auditor general for Scotland.
“The Ferguson Marine board has already introduced greater transparency and governance in terms of future retention incentives.
“Scottish ministers appointed a new chair, Andrew Miller, in January 2023 and we now have in place a framework that will improve the governance of future performance-related payments.
“We appreciate the points Mr Boyle is making regarding the completion of the ferries/funding gap, given that the shipyard is funded by public money.
“However, it is important to understand that the gap he identifies is largely to cover increased contingency expenditure – recommended by independent experts appointed by the Scottish Government, as well as funding for additional warranty spend that may arise in the 12 months after we hand over the vessels.”
Mr Tydeman said the construction costs to build both vessels are not a “major contributing factor” to the funding gap.
He said there is a “strong future” for the yard through winning contracts from companies such as Caledonian Maritime Assets Ltd (CMAL) and BAE Systems to make ships and frigates.
“Securing this business, alongside completion of the two dual fuel vessels, is now our primary focus and central to the future of the yard,” he said.
The Scottish Tories’ shadow transport minister, Graham Simpson, said the report was “utterly damning”.
He said: “Even at the already eye-watering cost of more than £300m there is still a shortfall in funding and we have no guarantees from the SNP transport minister that these ferries will be completed.
“Betrayed islanders will be wondering when this SNP ferry fiasco will ever end.
“The report also contains the remarkable revelation that the future of Ferguson Marine remains uncertain despite hundreds of millions of taxpayers’ money being poured into it on the SNP’s watch.”
He said the Scottish Government needed to “urgently” update the public on its plans for the yard and ensure its future viability
A spokesperson for the Scottish Government said it is committed to helping the shipyard secure a long-term, sustainable future.
“We expect the company to provide a strategic business plan to ministers in due course for comment and agreement.
“It is a concern that FMPG did not inform or seek approval from the Scottish Government before bonus payments were paid to senior managers. This should be done as a matter of good governance.”