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The next item of business is a statement by Kate Forbes, the Deputy First Minister, on Ferguson Marine. The Deputy First Minister will take questions at the end of her statement, so there should be no interventions or interruptions.
15:06
I welcome the opportunity to update the Parliament on Ferguson Marine. My statement will build on the Cabinet Secretary for Transport’s statement and set out clearly the Scottish Government’s commitment to doing all that we can to secure the yard’s long-term future.
Ferguson Marine is the last commercial shipyard on the Clyde. It supports skilled employment in Inverclyde, and it plays an important role in Scotland’s wider industrial capability. In 2019, the Government brought the yard into public ownership to safeguard jobs and shipbuilding skills and to complete the Glen Sannox and the Glen Rosa. Our priority now is to secure a sustainable future for the yard, with clear work, improved delivery confidence and a modernised facility.
Progress on current vessels is important context for the decision that I will set out. The MV Glen Sannox has now completed her first year in service, and the MV Glen Rosa continues to make progress, with delivery anticipated to be in the fourth quarter of 2026. I recognise the frustration felt by the Parliament, island communities and the workforce as a result of the delays and cost pressures associated with the Glen Sannox and the Glen Rosa. I also recognise the impact on those affected, particularly the island communities that rely on the ferries for work, family life and essential services. Their frustrations are justified, and I understand the strength of feeling.
Delivery challenges have rightly led to scrutiny of the yard’s performance and of past decisions. That scrutiny is both necessary and appropriate, but it is also a catalyst for change. As the Glen Rosa build enters its latter stages, we also need to address the longer-term future of the shipyard. A new senior leadership team is in place, with stronger commercial disciplines, clearer accountability and improved assurance reporting. Oversight has been strengthened and governance arrangements have been tightened. The annual accounts for 2024-25 and Audit Scotland’s accompanying report were published in December. Taken together, they demonstrate measurable improvement in governance and controls compared with previous years. Those arrangements are designed to support better planning, firmer cost control and more consistent delivery. It is on that strengthened foundation that I am now able to set out the next steps.
Securing the long-term future of the yard requires a clear and credible pipeline of work. In her statement, the Cabinet Secretary for Transport set out that the Scottish Government proposes to directly award the contracts for two ferries under phase 2 of the small vessel replacement programme to Ferguson Marine. In addition, I can also announce that ministers propose to award contracts for a further two vessels to Ferguson Marine—replacements for the marine research vessel Scotia and the marine protection vessel Minna. Together, that represents a programme of four new vessels that it is proposed will be built in the yard. That is a substantial and clear demonstration of our confidence in Ferguson Marine.
Ministers must, of course, ensure that public contracts are awarded in accordance with legal requirements and that they demonstrate value for communities and for the taxpayer. A detailed due diligence process is under way in the Scottish Government to closely assess the viability and implications of the proposals, and engagement with the Competition and Markets Authority is among the steps that are required before any formal contract award decisions can be made.
It is important to be clear about why the vessels in question are a strong fit for the yard and why we have confidence in Ferguson Marine to build them. First, they are of a scale and technical profile that match the yard’s facilities and workforce capability. The proposals are supported by strengthened governance and assurance, so that progress, costs and risks would be properly managed throughout delivery. Secondly, there is continuity of experience. In several cases, the new vessels will replace vessels that were previously built at the yard, building on knowledge of similar vessel types and public service requirements. Thirdly, the proposed programme would support steady delivery, because a pipeline of vessels would allow the workforce to move from project to project and would support investment in training, apprenticeships and productivity.
The proposed programme is intended as a bridge to the future, but it is not the limit of our ambition for Ferguson Marine. A sustainable shipyard must be able to win and deliver work beyond a single customer, so ministers intend to return the business to the private sector when the time is right. The proposed programme would provide a stable baseline that would allow the yard to plan its workforce, strengthen its supply chain and invest in improved ways of working. It would also provide the yard with an opportunity to re-establish itself as a credible and competitive shipbuilder by demonstrating consistent delivery, controlling costs and delivering vessels that perform in service.
The proposed four-vessel programme would form the core of the yard’s workload over the next five years. Alongside that, the yard would continue to have capacity to take on other commercial work, where that can be planned and delivered without compromising the delivery of the public service vessels.
I have previously announced a commitment of up to £14.2 million over two years to support the modernisation of Ferguson Marine, which, again, is subject to due diligence in advance of formal investment decision making. In the current financial year, interim investment has focused on essential repairs, health and safety improvements and targeted equipment upgrades. Those measures were necessary to stabilise operations and support the delivery of the MV Glen Rosa, but they were not transformational. Further modernisation must be aligned with the needs of the proposed vessel delivery programme, so that investment supports efficient production and improved productivity.
Our proposal to progress with four new directly awarded vessels provides the clarity that is needed to plan modernisation properly. We are working with the yard to optimise sequencing and to develop an updated business plan that must undergo legal, commercial and subsidy control assessments before formal decisions on contract awards can be made. By linking workload to modernisation and governance, the yard would upgrade infrastructure, improve productivity and streamline production practices while vessel projects were under way. That approach would provide continuity for the workforce, stability for the supply chain and a stronger foundation for a competitive and sustainable future.
The substantial proposals that we are announcing today would deliver for Ferguson Marine, for island communities and for Inverclyde. We are strengthening ferry resilience and connectivity for communities that rely on dependable services. At the same time, our plans for new vessel awards would support skilled employment and industrial capability in Inverclyde, where Ferguson Marine remains an essential part of the local economy and a shipyard of national industrial importance.
I have spoken about investment in the yard and in new vessels, but I also place on record my sincere thanks to the workforce at Ferguson Marine. Through a prolonged period of challenge, scrutiny and uncertainty, they have continued to demonstrate professionalism, resilience and a deep commitment to their craft. Shipbuilding is highly skilled and demanding work that requires precision, teamwork and pride in delivery. Despite the pressures surrounding recent projects, the workforce has remained focused on completing complex vessels to a high standard and on maintaining the yard’s reputation for engineering expertise.
I also recognise that uncertainty affects not only those who are employed at the yard, but their families as well. Stability and clarity matter deeply to the people whose livelihoods depend on Ferguson Marine, and I acknowledge the constructive role of trade unions in supporting stability, reform and improvement. Their engagement is important in helping to steer the yard through difficult times and towards a more secure future. I spoke to Alex Logan and Kenny Meechan of the GMB again this morning, and they stressed the need to retain the young workforce at Ferguson Marine.
My statement makes clear that the Scottish Government is committed to doing all that we can to secure a competitive, productive and sustainable future for Ferguson Marine. With our proposal to award a four-vessel programme to the yard, we are setting a clear ambition for Ferguson Marine’s future—one that is built on shipbuilding confidence, capability and continuity. We rescued Ferguson Marine for a purpose, and we are determined to see it succeed.
Before we move to questions, I highlight that the Presiding Officers should not read in the media that details of an announcement of this significance are in circulation shortly before it has been made to Parliament. That is extremely disappointing, and it is disrespectful to this Parliament and its elected members.
The Deputy First Minister will now take questions on the issues raised in her statement. I intend to allow about 20 minutes for questions, after which we will move on to the next item of business. It would be helpful if those members who wish to ask a question would press their request-to-speak buttons.
I thank the Deputy First Minister for advance sight of her statement. I welcome the announcement that the Scottish Government intends to return Ferguson Marine to the private sector
“when the time is right”.
Securing international contracts is the best way to ensure that shipbuilding remains on the Clyde. That being said, while the yard remains in public hands, it should be expected that it will provide value for money for taxpayers and deliver for our island and coastal communities.
What engagement has the Deputy First Minister had with the board of Ferguson Marine on the MV Glen Rosa? Does she envisage any delays and cost increases before the latest promised delivery date for the vessel, which is the end of this year?
Secondly, given the long-standing issues with the construction of the MV Glen Sannox and the MV Glen Rosa at Ferguson Marine, what guarantees has the Deputy First Minister had from the yard that the four new vessels will be delivered on time and on budget?
I engage very regularly with the chief executive, largely, and the chair of Ferguson Marine about the Glen Rosa. I have said to the Parliament before that the priority is to deliver that vessel. Sue Webber will be aware that, with the yard having an additional pipeline of work, there is an even stronger incentive to complete the Glen Rosa on time, because further work is coming.
I note that Ferguson Marine formally advised the Net Zero, Energy and Transport Committee that the target delivery date for the MV Glen Rosa is now quarter 4 of 2026, and that it provided additional information on the cost to complete the vessel, which had increased to £192 million.
I reassure Sue Webber that that engagement happens regularly, but I have often heard it said that, with an additional pipeline of work, the incentive to complete the ship to that schedule increases significantly.
I thank the Deputy First Minister for advance sight of her statement. The number 1 reason why we do not have a resilient ferry service is that we do not have a resilient ferry fleet. The SNP has taken almost 19 years to equal the number of ferries that were built under the Scottish Labour-led Government in the previous eight years.
I welcome the decision to directly award two ferries and two marine vessels to Ferguson Marine. The yard has a track record of building such vessels, and Scottish Labour has said before that the Scottish Government needs to lead by example by awarding the yard future work.
I join the Deputy First Minister in commending the work of the GMB, and particularly Alex Logan. There has been a lot of blame going around about the ferries fiasco, but the one group of people who have been blameless throughout are the workforce.
When does the Deputy First Minister expect work on the vessels to start and to be completed by? When will the business plan for yard modernisation be updated? To give confidence to the Parliament, the public and the workforce, will the Deputy First Minister say which of those measures will be completed by the time she leaves office?
It is worth putting on record what my colleague said a few moments ago—that a third of the vessels in the fleet are being replaced as we speak, and we have, today, set out plans for further work.
When it comes to timescales, due diligence and formal approvals are required, so I will reserve my position on when the work will start. However, we understand that the sequence will be the completion of the Glen Rosa, then the bridge to those four additional vessels. As I said in my statement, we expect the proposed programme to provide additional work over the next five years but, critically, it will also allow for the yard to secure additional work on the open market.
It is critical that that pipeline of work is understood as a means to bridge the gap. It is not a case of wanting Ferguson Marine to work with only one customer—namely, the Scottish Government.
I thank the Deputy First Minister for what is an outstanding announcement and show of support for our yard and my community. It will be welcomed by the workforce, their families and all of Inverclyde. I pay particular tribute to Alex Logan, the GMB shop steward, who has been tireless in his efforts for many years to safeguard the yard.
My father worked at the yard before he passed, so today’s announcement means so much more to me. It is about the future of shipbuilding in Port Glasgow and Inverclyde.
Can the Deputy First Minister provide assurances that the announcement gives the current apprentices the security that they need to plan their futures, allows more apprentices to be taken on and have a future at Ferguson Marine, and gives the management the opportunity to push ahead, deliver those vessels, win more orders and turn around the negativity about the yard that has, sadly, been apparent for many years?
Stuart McMillan has been a tireless advocate for the future of Ferguson Marine and has often made the point to me that Ferguson Marine is more than just an employer. It is an absolutely critical part of the Inverclyde economy and is loved by the wider community, who recognise the role that it has played over many generations. I am grateful to Stuart McMillan for his representation of his constituents.
He talked about apprenticeships. It is critical that apprentices have confidence that there is a future for the yard. I hope that delivering the pipeline of work of those four additional vessels will give apprentices in particular the confidence that they will have work for many years to come.
Currently, Ferguson Marine employs 38 apprentices. Since nationalisation, the yard has created 91 apprenticeships. The proposed programme of four vessels will enable the current apprentices to complete their apprenticeships. As we all know, given the scale of shipbuilding in Scotland right now, there is huge competition over those extremely talented and skilled apprentices. My hope through the announcement is that they will continue to support the workforce at Ferguson Marine.
We in the Net Zero, Energy and Transport Committee have heard that the underrecoveries for Ferguson Marine run at about £1 million a month. That is required just to keep the lights on, and there will be considerably larger costs to run the yard between now and when the contracts come on stream. Will the cabinet secretary confirm that the figure that was given to the Net Zero, Energy and Transport Committee—of costs of 20 to 25 per cent over and above the costs at any other yard—is what it would cost to award the vessels to Ferguson Marine? Effectively, she is ordering four boats, but she could have bought five somewhere else. Is that figure of 20 per cent no longer valid?
I will talk about the principle then come to the specific figure.
On the additional cost, we know how critical it is for the yard to undergo a programme of modernisation. If Ferguson Marine is to meet the objective that I have set—to secure work on the open market—it needs to be as competitive as possible. We have provided the additional capital investment in order to support Ferguson Marine’s modernisation objective, and it has been very clear about how it could invest in additional equipment and so on, so that it is internationally competitive. It has not been possible to release all that capital before there was work, because it needs to be clear that that investment is aligned with income that is coming into the yard. With the announcement that I have made today, we are now able—subject to all the due diligence points that I have previously made—to release additional funding from that capital commitment.
The 20 per cent figure is not one that I am familiar with. It is important to state that, in undergoing the programme of modernisation, Ferguson Marine will need to work with the Scottish Government and others to ensure that the costs are appropriate. That is the reason for undertaking the due diligence work. However, I would be very sceptical of figures that are provided at this point, because they are in advance of both the due diligence process and the modernisation work that is required.
I warmly welcome the announcement of new vessel procurement at Ferguson Marine. However, given the difficulties in the construction of the Glen Sannox and Glen Rosa, will the Deputy First Minister elaborate on the Scottish Government’s future vision for the yard and how it will be supported to secure future contracts and long-term careers for the workforce?
The commitment is to support Ferguson Marine to compete on the open market for additional work in order to safeguard its future. We will support it to do that in two ways: first, through the capital funding that has been announced to support modernisation and, second, through this bridge of four additional vessels.
All of us in the chamber know that Ferguson Marine has been subject to extensive debate. When it comes to Ferguson Marine operating or securing work, it needs to be able to demonstrate delivery. We believe that the four vessels are consistent with the technical capabilities of Ferguson Marine and the skills of the workforce; indeed, in many cases, they are replacements for vessels that it previously built. They are an excellent fit and will allow it to demonstrate that it is able to deliver vessels on budget and according to the timescales that I have outlined, which I believe will help it to secure work on the open market.
I remind members of my voluntary register of trade union interests.
We have said all along that we just want these workers to be given a fighting chance to win orders, so I certainly welcome today’s news.
Back in October, the Deputy First Minister told me that, of the £14.2 million set aside for capital investment in the yard, only £570,000 had been spent. When will the rest of the capital investment be released?
The Deputy First Minister talks of working with the yard to optimise sequencing. Will the Government learn the lessons of the past 10 years and listen less to directors, management consultants and retired rear admirals and much more to the skilled and experienced workforce and their trade unions on how best to optimise sequencing?
Finally, when will the results of the Grant Thornton forensic audit of the £124 million of public money that was handed over when the yard was in private ownership be published?
That allows me to specifically name Alex Logan and put on the record how grateful I am to him for his absolutely tireless and unwavering commitment to the yard. I am sure that he could have spent any free time that he had in other ways, yet his dedication to the people of the yard and to the future of Ferguson Marine is absolutely remarkable. If nothing else, this Parliament should come together in acknowledging the phenomenal work that Alex Logan has done. It has always been a great pleasure to engage with him, and I have learned so much from my engagement with him.
On the question about additional capital funding, I said in my answer to Edward Mountain that, to date, we have focused on stabilisation, essential repairs, health and safety improvements and targeted equipment upgrades. However, securing this additional pipeline of work enables us to release the additional capital, because it is aligned with projects. We obviously have to navigate our way through the due diligence process associated with subsidy control, but it enables us to release the additional capital.
I advise members that a number of members seek to ask a question—one question, not three. It would be helpful if we could have succinct questions and answers, otherwise those members will not get their questions asked.
Can the Deputy First Minister say any more about the choice of the four vessels and why they are ideal candidates for the development and success of the yard?
In terms of the support for the workforce and for the yard, we will continue to keep Parliament updated on the progress that we make. I am very conscious that, over the next three weeks, before the pre-election period, we will make rapid progress within Government on the steps that I have outlined, so we will return to Parliament with additional information after the election.
Lack of a detailed engineering design specification at place of order was what kicked off the difficulties with the current vessels and, at the time, caused those of us who worked in marine construction to raise our eyebrows in shock. What is the status of the design specification for the new vessels? Does Ferguson Marine actually know what it will be building?
Obviously, there has been engagement up to this point, particularly from Marine Scotland. The member will appreciate that, within Government, there are quite tight lines of communication. My responsibility is to Ferguson Marine, which, in this case, would be constructing the vessels. Quite rightly, I am not particularly close to the parts of Government that would be procuring the vessels—namely Transport Scotland and Marine Scotland. That is for a very important reason. However, I understand that there has been a sufficient exchange of information to know that these vessels are a good fit for Ferguson Marine.
I absolutely welcome any intention to give the yard some work. It has cross-party support and the yard has been crying out for it for a number of years, so any move towards that is positive and I am grateful for it.
However, I feel a little bit of uncertainty around the ministerial statement. I read carefully the language used in the statement and listened carefully to the Deputy First Minister’s language around the uncertainty of CMA approval for this. At stage 1, the Government was adamant that it could not make a direct award, so what has changed in the interim period? Is it an intention to award more work, is it a hope to award new work, or is it a desire to award new work? Also, when will we know, finally, whether that is possible?
There is a very thorough process and we know what steps are required. Officials are progressing a dedicated programme of work to assess and enable the proposed approach. The programme brings together all the relevant policy, legal, commercial, finance, procurement and delivery teams across Government. We always balance the tension of letting Parliament know the direction of travel before all the work is done, because Parliament keeps asking—for good reason—and also because, once that work is under way, it is sometimes harder to keep a lid on some of the material. I know that Parliament has always called for additional scrutiny, so we are making the announcement having done initial work with the support of independent advisers to strengthen assurance and provide external challenge. We are now going to progress with the next steps around ensuring that it is compliant with the CMA, with due diligence and so on. Obviously, compliance is not optional—compliance is required.
It is vital that we invest in the yard’s future sustainability, so I warmly welcome this announcement from the Deputy First Minister. Can she say any more about the expected timeline for delivery of these vessels and the benefits of a confirmed pipeline of work?
I said in my statement that it would be over the next five years. There is a programme to complete the Glen Rosa, and it is important to reiterate the requirement for the yard to complete the Glen Rosa. That requirement has been updated to imply that it will be complete in Q4, and we anticipate the work being ready to go shortly after that.
I am not entirely sure what we have heard in the announcement, because so much of what the Deputy First Minister has said seems to be uncertain. Indeed, she did not properly answer Jamie Greene’s question. It sounds to me like a statement of the direction of travel, or some kind of indication of an intention, rather than the announcement of an actual award. That is probably down to the fact that the £14.2 million is subject to subsidy control and the orders are dependent on that funding.
Can the Deputy First Minister assure members that this is not yet another false dawn for Ferguson Marine and that there is not legal advice that may yet block the intention from becoming a reality?
I can unequivocally say that the orders are not dependent on the distribution of the £14.2 million, but we know that that can run alongside the projects. In my earlier answer to Edward Mountain, I was referring to the fact that we need to be able to demonstrate income if we are going to provide funding—that is a fairly basic element of subsidy control. We cannot simply give funding without there being an obvious source of revenue for the yard. That is the point that I was making—it is not that the vessels are dependent on the £14.2 million.
With regard to the announcement today, I have announced our proposal to directly award four new vessels—to which I have referred—to Ferguson Marine. Any award proceeds following the completion of detailed legal, commercial and subsidy control assessments—that is a fairly ordinary, normal part of the work that Government does, and engagement with the CMA forms part of that process. We are setting out today our proposal to directly award four new vessels to the yard, so that is not really up for debate.
As the Deputy First Minister set out, Ferguson Marine has seen welcome improvements in governance and reporting, and, alongside today’s significant announcement, it is essential that that trend continues. Will the Deputy First Minister let us know what steps the Scottish Government is taking to ensure good planning, cost control and delivery on site, and will she set out how oversight and governance arrangements have been strengthened by senior leadership at the yard?
All those points are absolutely critical. We recognise that there have been reputational challenges in the past, but the yard is demonstrating its wider industrial capability. It has successfully delivered a pilot project for BAE Systems as part of the type 26 frigate programme, and it has secured further contracts from BAE, supporting skilled jobs at the yard. That is a positive endorsement of the workforce and facilities, and it represents an important step towards greater sustainability off the back of the work that we have done to ensure good governance.
The four-vessel programme is very welcome news indeed, because demand signal is critical to shipyard viability. However, does the Deputy First Minister agree that it has to be a springboard for the development of commercial shipbuilding in Scotland? Getting the pipeline in place, and getting the facilities up to scratch and world standard, is key. However, if we are going to win contracts on the open market, it is critical that we get shipbuilding finance in place in Scotland, because that is currently the main blocker to winning non-public sector contracts. Can we fix that problem, too?
Paul Sweeney has been a regular advocate for, and representative of, the yard, and I pay tribute to him, in particular, for his questions around the direct award. He is absolutely right that what I have announced is a means to an end. It is a springboard—it gives the yard work and it means that it has a future, but that is not the full picture. Ultimately, the yard needs to take the opportunity that is provided by the direct award and the capital investment to modernise and secure work and to ensure that its reputation enables it to engage properly with other customers.
That concludes the statement.