Chamber and committees

The report highlights the use of data and the early modelling work that the Scottish Courts and Tribunals Service carried out. Is that modelling work still being used to inform decision making as work continues to address the backlog?

Sorry, I am closing.

Paul Sweeney mentioned that, if we want to be a shipbuilding nation, we need to look at the basics. Rhoda Grant said that we needed to sign off a design that would fit harbours—it may have helped for her to have been part of the procurement process.

I take the opportunity to restate the committee’s call for a formal review of the project to be undertaken on completion of the vessels, which will help the Scottish Government to learn vital lessons for the future so that Scotland’s taxpayers and island communities can have confidence in the procurement and construction of future vessels.

I thank those in the clerking team for the huge amount of work that they have put into compiling the report and I thank Audit Scotland for its input. I also thank members from around the chamber for their contributions today. It is reassuring to know that so many are committed to scrutiny of the issues raised in the report.

Although I am pleased to close the debate on behalf of the Public Audit Committee, I do so with considerable regret that this Parliament is once again debating two vessels that should have set sail five years ago but are currently three and a half times over budget. Significant failings throughout the project have let islanders down and have caused disruption to their lives. Lessons must be learned.

I start by echoing the convener’s concerns about the Scottish Government’s response to the committee’s report. It is a seven-page document, of which only around half addresses the committee’s key findings, conclusions and recommendations, whereas the rest merely reproduces large sections of our report and lacks the detail that the committee hoped for.

For example, the committee expressed serious concerns about Transport Scotland’s role in the project. As CMAL’s sponsor, Transport Scotland had a critical role in communicating important information to Scottish ministers on CMAL’s behalf. We are clear that it consistently failed to reflect CMAL’s significant concerns to Scottish ministers, whether those were in relation to the high-profile public announcement of FMEL as the preferred bidder or the awarding of the contract to FMEL.

Given the extent of the concerns that CMAL raised regarding the financial risks associated with the contract, Transport Scotland should have sought written authority from Scottish ministers before any further progress was made with the project. Indeed, as it materialised, the absence of a full builders refund guarantee, coupled with there being no general quality standards in the contract, resulted in CMAL’s position being significantly weakened when problems with the standard of FMEL’s work became apparent. Brian Whittle and Jamie Greene covered those points in detail in their speeches. No comment at all is offered in relation to any of those concerns.

The Scottish Government’s response does, however, highlight the recent approach that has been taken with the provision of the written authority to secure the continued build of vessel 802 at FMPG. It is recognised that the Scottish public finance manual has specific requirements for the notification of any instance of written authority, which must be drawn to the attention of the Auditor General. I welcome that that was adhered to. However, I take this opportunity to reiterate the committee’s call for the Scottish Government to follow the UK Government’s example and proactively publish on its website a list of all occasions when written authority has been sought, in order to improve openness and transparency in that area.

I turn to the committee’s concerns about the Scottish Government’s commitment to paying additional vessel costs regardless of the final price. Although the Scottish Government has challenged this assertion, the committee remains concerned about the on-going significant risk that costs will continue to rise. That is, of course, now proving to be the case, with the former Deputy First Minister announcing in March that an additional £6 million would be allocated in the financial year 2022-23. That comes alongside the more recent announcement by the cabinet secretary in May, which clarified that additional money will be allocated during the current financial year following a process of due diligence.

It is extremely disappointing that at no point does the Scottish Government’s response address the committee’s well-founded concerns about those soaring costs. The final costs are still unknown. Willie Rennie raised his concern about a blank cheque being written, which is also a concern for the committee.

The Scottish Government’s response does, however, welcome

“the report’s recognition that there have ... been significant improvements in procedures and processes”

by Transport Scotland and CMAL since the procurement of vessels 801 and 802.

Graham Simpson spoke about the lack of transparency and accountability and the lack of a builders refund guarantee, which was mentioned by quite a few members. Craig Hoy spoke about the insufficient evidence to explain why ministers made their decisions, which the committee would like to have more transparency over. He also mentioned that island communities are paying the price, which was mentioned by many members, including Rhoda Grant, Alasdair Allan, Neil Bibby and Stuart McMillan. Stuart McMillan also raised concerns that the shipyard’s workforce was being criticised. I say to him that the report’s criticism was of the ministers and Government bodies that took the decisions, not the workforce.

That was covered in the committee’s report. It has been noted that there has been an improvement in the relationships between them, but we obviously need to keep tabs on that.

It is fair to say that the report notes some signs of progress. For example, we are encouraged that there appear to be signs of more constructive relations between the new management and the workforce and between FMPG and CMAL. However, the committee wants to see much more progress to ensure that this situation never happens again.

Although we note the action that the Scottish Government has taken to publish a business investment framework to strengthen its approach to investment in private businesses, we are clear that the work should not stop there. That is why we are calling for more to be done to strengthen the framework to better outline intentions over risk tolerance and risk appetite and the expected public benefit of future interventions. The Government indicates in its response that it is

“in active engagement with Audit Scotland”

on the matter, but it is unclear how or indeed when that will be achieved.

I turn to the intervention of several Scottish ministers throughout the project, on which a majority of committee members raised concerns. Central to those concerns was a lack of transparency about why certain decisions were taken, whether that involved a lack of documentary evidence to clarify why the former First Minister led on the very public announcement of the preferred bidder, a lack of documentary evidence to explain why Scottish ministers accepted the associated risks in approving the awarding of the contract to FMEL, or the fact that a full record of a meeting between the former director of FMEL and the former First Minister appears not to exist.

Even more challenging is that poor record keeping means that the Scottish Parliament and the public are in the dark about what happened at some crucial stages of the project. Although it is encouraging that the Scottish Government has issued new guidance on the recording of decisions, we are unanimous in calling on it to further review and refine its record-keeping procedures, which would facilitate scrutiny and improve transparency as well as accountability. I share the convener’s concerns that the Scottish Government’s response to that recommendation does not provide the committee with any meaningful detail on how it is being addressed. A number of developments have taken place since the report was published, and it is clear that further developments will follow.

Notwithstanding our continued scrutiny of the auditor general’s section 22 report on FMPG, we await the Net Zero, Energy and Transport Committee’s forthcoming report on a modern and sustainable ferry service for Scotland and the next steps that are associated with the governance review, project Neptune. It is encouraging that the Government shares the committee’s opinion that the review does not represent a silver bullet in preventing a similar situation from occurring again.

Presiding Officer, do I have time to cover members’ contributions?

I have previously, on three separate occasions, asked about the location, cost and treatment of the proposed peace institute, but no answers have been provided regarding those specific points. Will the cabinet secretary use this opportunity to share how much money has been spent so far, the projected cost and the number of civil servants who are involved?

Okay. I have a question for David Tydeman. Do you agree with the current cost projection—not that the committee knows what the current cost projection is, because it has not been shared—and the delivery date for vessel 802? Can you confirm the date on which you currently expect to deliver vessel 802?

Okay. Thanks.

We were pleased to see the written authority coming through. The Scottish Government has also confirmed that it is going to publish confirmation of any written authorisations on its website. Can you confirm whether the intention is that the Scottish Government will publish all instances of written authority provided to date in one place on its website, so that that information is transparent for anyone who wishes to access it?

The committee has been talking for quite a while about whether a blank cheque was issued. Should the scrutiny work not have taken place much earlier?

You do not have a figure that you can share with the committee.